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8 Dec 2019

A bank may lend an amount equal to its:

  1. Required reserves

  2. Total reserves

  3. Total assets

  4. Excess reserves

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Deanna Hettinger
Deanna HettingerLv2
8 Dec 2019
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Related textbook solutions

Introductory Statistics
OER Edition, 2013
Openstax
ISBN: 9781938168208

Related questions

Which of the following statements is true?

  1. Banks can continue to make loans until the excess reserves equal their required reserves.

  2. Banks can continue to make loans until their total reserves equal their account balances.

  3. Banks can continue to make loans until their total reserves equal their excess reserves.

  4. Banks can continue to make loans until their total reserves equal required reserves.

Β When a check is drawn and cleared, the

A. Reserves and deposits of both the bank against which the check is cleared and the bank receiving the check are unchanged by this transaction.

B. Bank against which the check is cleared loses reserves and deposits equal to the amount of the check.

C. Bank receiving the check loses reserves and deposits equal to the amount of the check.

D. Bank against which the check is cleared acquires reserves and deposits equal to the amount of the check.

The amount of reserves that a commercial bank is required to hold is equal to:

Β 

  1. The amount of its checkable deposits.

  2. The sum of its checkable deposits and time deposits.

  3. Its checkable deposits multiplied by the reserve requirement.

  4. Its checkable deposits divided by its total assets.

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