Question 1
Suppose a transaction changes a bank's balance sheet as indicated in the following T-account, and the required reserve ratio is 10 percent.
As a result of the transaction, the bank can make a maximum loan of
◦ $0.
◦ $200.
◦ $1,800.
◦ $2,000.
Question 2
Consider the following T-account for National City Bank:
If the required reserve ratio is lowered to 8 percent, how much can National City loan out?
◦ $10,000
◦ $8,000
◦ $2,000
◦ $0