18) A single commercial bank must meet a 25% reserve requirement. If it initially has no excess reserves and then $2,000 in cash is deposited in the bank, it can increase its loans by a maximum of A) $2,000. B) $1,500. C) S1,250. D) S1,750.

18) A single commercial bank must meet a 25% reserve requirement. If it initially has no excess reserves and then $2,000 in cash is deposited in the bank, it can increase its loans by a maximum of A) $2,000. B) $1,500. C) S1,250. D) S1,750.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter4: Going Into Debt

Section: Chapter Questions

Problem 6AA

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Question

18) A single commercial bank must meet a 25% reserve requirement. If it initially has
reserves and then $2,000 in cash is deposited in the bank, it can increase its loans by a maximum
of
no excess
A) $2,000.
B) $1,500.
C) S1,250.
D) S1,750.

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