Table 29-3 The First Bank of Roswell Assets Liabilities Reserves $30,000  Deposits $200,000 Loans 170,000        Refer to Table 29-5. Suppose the bank faces a reserve requirement of 10 percent. Starting from the situation as depicted by the T-account, a customer deposits an additional $60,000 into his account at the bank. If the bank takes no other action it will   a. be unable to make any new loans.     b. be in a position to make new loans equal to a maximum of $6,000.     c. have $4,000 in excess reserves.     d. have $64,000 in excess reserves.

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Table 29-3

The First Bank of Roswell
Assets Liabilities
Reserves $30,000  Deposits $200,000
Loans 170,000     
 

Refer to Table 29-5. Suppose the bank faces a reserve requirement of 10 percent. Starting from the situation as depicted by the T-account, a customer deposits an additional $60,000 into his account at the bank. If the bank takes no other action it will

  a. be unable to make any new loans.  
  b. be in a position to make new loans equal to a maximum of $6,000.  
  c. have $4,000 in excess reserves.  
  d. have $64,000 in excess reserves.
Expert Solution
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Required reserve ratio is the percentage of deposits that must be held as required reserves by banks.

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