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Suppose the banking system currently has $400 billion in reserves, the reserve ratio is 25%. The public holds no cash and all banks do not hold excess reserve. What is the level of loans? a. $1000 billion p. $1100 billion E. $1200 billion d. $1300 billion

Suppose the banking system currently has $400 billion in reserves, the reserve ratio is 25%. The public holds no cash and all banks do not hold excess reserve. What is the level of loans? a. $1000 billion p. $1100 billion E. $1200 billion d. $1300 billion

FINANCIAL ACCOUNTING
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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Suppose the banking system currently has $400 billion in reserves, the reserve ratio is 25%. The public holds no cash and all banks do not hold excess reserve. What is the level of loans? a. $1000 billion 5. $1100 billion c. $1200 billion d. $1300 billion
Transcribed Image Text:Suppose the banking system currently has $400 billion in reserves, the reserve ratio is 25%. The public holds no cash and all banks do not hold excess reserve. What is the level of loans? a. $1000 billion 5. $1100 billion c. $1200 billion d. $1300 billion
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