If a bank has a required reserve ratio of 30 percent, excess reserves of $45,000,000, and deposits of $100,000,000, how much can the bank lend out?
a. $13,500,000
b. $30,000,000
c. $43,500,000
d. $45,000,000
e. $145,000,000

option (D) $45,000,000

Explanation:

Data provided in the question:

Required reserve ratio of bank = 30 percent

Excess reserves = $45,000,000

Deposits = $100,000,000

Now,

The maximum amount of loan that the bank can lend out will be equal to the amount of existing excess reserves that the bank has with them.

Therefore,

The maximum loan bank can lend out = Excess reserves

or

The maximum loan bank can lend out = $45,000,000

Hence,

The correct answer is option (D) $45,000,000

answerpublish a notice of the proposed rulemaking proceeding in the federal register;

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.