Question

Refer to the accompanying consolidated balance sheet for the commercial banking system. Assume the required reserve ratio is 12 percent. All figures are in billions of dollars. The maximum amount by which the commercial banking system can expand the supply of money by lending is

Answer 1

Answer:

$350 billion

Explanation:

Base on the scenario been described in the question, referring to the consolidated balance sheet, for the commercial banking system the maximum amount by which the commercial banking system can expand the supply of money by lending to is customers using a assumed reserve ratio of 12% percent in billions is $350 billion.

This is the stipulated amount the commercial banking system can expand in the lending of money.