Question
Assume that Company XYZ deposits $500,000 in cash in the Bank of New Brunswick. If the bank had no excess reserves before the deposit was
Assume that Company XYZ deposits $500,000 in cash in the Bank of New Brunswick. If the bank had no excess reserves before the deposit was made and the target reserve ratio is 20 percent, what is the maximum amount of new loans that the bank can now offer?
Multiple Choice
- $400,000.
- $500,000.
- $2,000.
- $100,000.
- $2,500,000.
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Managerial Economics A Problem-Solving Approach
Authors: Luke M. Froeb, Brain T. Mccann
2nd Edition
B00BTM8FK0
