A chartered bank has demand-deposit liabilities of $500,000, cash reserves of $650,000, and a desired reserve ratio of 20 percent. The amount by which this single chartered bank and the amount by which the banking system can increase loans are respectively:

Question 2 options:

a)

$150,000 and $750,000.

b)

$350,000 and $1,750,000.

c)

$550,000 and $2,750,000.

d)

$650,000 and $3,250,000.

e)

None of the above