The maximum change in checkable deposits when the required reserve ratio is 10 percent is $10 million and when it is 12.5 percent is $8 million.
We will be using the formula to calculate the checkable deposits. The formula is given below.
Change in checkable deposits = change in excess reserves X 1/r
r= reserve ratio.
When reserve ratio is 10% that is 0.1 we get,
1/r=1/0.1= 10
excess of reserves is $1 million
Substituting in the formula , we get
Change in checkable deposits=$1 millionx10= $10 million.
When reserve ratio is 12.5% that is 0.125 we get,
1/r=1/0.125= 8
excess of reserves is $1 million
Substituting in the formula , we get
Change in checkable deposits=$1 millionx8= $8 million.
To learn more about checkable deposits refer here
https://brainly.com/question/13163805#
#SPJ4
