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.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter28: Monetary Policy And Bank Regulation

Section: Chapter Questions

Problem 14RQ: In a program of deposit insurance as it is operated in the United States, what is being insured and...

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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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