Assets Liabilities + Net Worth Reserves $50,000 Checkable Deposits $120,000 Loans 75,000 Stock Shares 130,000 Securities 25,000 Property 100,000

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Answer the question based on the following balance sheet for the First National Bank. Assume the reserve ratio is 15 percent:
 

Refer to the above data. If the balance sheet was for the whole commercial banking system rather than a single bank, then loans and deposits could expand by a maximum of approximately:

Select one:
a. $120,000
b. $213,333
c. $333,500 
d. $415,373
Liabilities + Net Worth
Reserves $50,000 Checkable Deposits $120,000
130,000
Assets
Loans
75,000 Stock Shares
Securities 25,000
Property 100,000
Transcribed Image Text:Liabilities + Net Worth Reserves $50,000 Checkable Deposits $120,000 130,000 Assets Loans 75,000 Stock Shares Securities 25,000 Property 100,000
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