A Commercial Bank Has $1,000,000 of Outstanding Demand Deposits and Actual

question 182

Multiple Choice

A commercial bank has $1,000,000 of outstanding demand deposits and actual reserves of $300,000. If the required reserve ratio is 20 percent, what is the maximum amount of new loans the bank can extend?

• A)​zero
• B)​$100,000
• C)​$300,000
• D)​$700,000

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