Answered: if the bank makes new loans so as to…

if the bank makes new loans so as to keep its reserve ratio unchanged, then the amount of new loans that it makes will be a. $1,800 b. $6, 750 c. $0 d. $2, 250 e. $7,200 f. $9,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Assets	Liabilities
Reserves $2,000	Deposits $10,000
Loans 8,000

Refer to Table.

Starting from the situation as depicted by the T-account, if someone deposits $9,000 into the First Bank of Fairfield, and if the bank makes new loans so as to keep its reserve ratio unchanged, then the amount of new loans that it makes will be

$1,800

$6, 750

$2, 250

$7,200

$9,000.

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