Question 1
Refer to the information provided in Scenario 25.2 below to answer the question(s) that follow.
SCENARIO 25.2: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.

Refer to Scenario 25.2. If the required reserve ratio were changed to 20%, total loans of Bank No. 2 will change to
◦ $64,000.
◦ $72,000.
◦ $74,250.
◦ $80,000.
Question 2
Only the required reserve ratio determines how much money the Federal Reserve can create.
◦ true
◦ false