Question

Reserves $27,000 Checkable Deposits $110,000 Loans 50,000 Stock Shares 200,000 Securities 33,000 Property 200,000 Refer to the accompanying balance sheet for the ABC National Bank. Assume the required reserve ratio is 20 percent. This bank can safely expand its loans by a maximum of:

Answer 1

Answer:

Bank can safely expand its loan until it has zero excess reserves i.e. up to a maximum of $5000.