Question

Suppose that you deposit $2,000 in your bank and the required reserve ratio is 10 percent. The maximum loan your bank can made as a direct result of your deposit is Group of answer choices

Answer 1

Answer:

the maximum loan could bank made as the direct result of the deposit is $1,800

Explanation:

The computation of the maximum loan could bank made as the direct result of the deposit is given below:

= Deposit amount × (1 - required reserve ratio)

= $2,000 × (1 - 0.10)

= $2,000 × 0.90

= $1,800

hence, the maximum loan could bank made as the direct result of the deposit is $1,800