Initially, the banking system has a required reserve ratio of 30.0 percent, $150,000 in total deposits, and no excess reserves. If the Fed reduces the required reserve ratio to 25.0, how much unused lending capacity does the banking system now have? Multiple Choice $30,000 $125,000 $150,000 $900,000

Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 8WNG
Question
Initially, the banking system has a required reserve
ratio of 30.0 percent, $150,000 in total deposits,
and no excess reserves. If the Fed reduces the
required reserve ratio to 25.0, how much unused
lending capacity does the banking system now
have? Multiple Choice $30,000 $125,000 $150,000
$900,000
Transcribed Image Text:Initially, the banking system has a required reserve ratio of 30.0 percent, $150,000 in total deposits, and no excess reserves. If the Fed reduces the required reserve ratio to 25.0, how much unused lending capacity does the banking system now have? Multiple Choice $30,000 $125,000 $150,000 $900,000
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