18) A single commercial bank must meet a 25% reserve requirement. If it initially has no excess reserves and then $2,000 in cash is deposited in the bank, it can increase its loans by a maximum of A) $2,000. B) $1,500. C) S1,250. D) S1,750.
18) A single commercial bank must meet a 25% reserve requirement. If it initially has no excess reserves and then $2,000 in cash is deposited in the bank, it can increase its loans by a maximum of A) $2,000. B) $1,500. C) S1,250. D) S1,750.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:18) A single commercial bank must meet a 25% reserve requirement. If it initially has
reserves and then $2,000 in cash is deposited in the bank, it can increase its loans by a maximum
of
no excess
A) $2,000.
B) $1,500.
C) S1,250.
D) S1,750.
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