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If a bank receives a new deposit of [tex]$10,000, how much of the deposit would the bank be able to loan out? (Assuming current excess reserves are $[/tex]0 and a 10% reserve ratio).

A. [tex]$1,000
B. $[/tex]9,000
C. $10,000
D. None of the above

Sagot :

GinnyAnsweridn
Let's break down the problem to understand how much the bank can loan out from a new deposit of [tex]$10,000, given a reserve ratio of 10%. ### Step-by-Step Solution: 1. Understanding Reserve Ratio: - The reserve ratio is the percentage of deposits that a bank must hold in reserve and not loan out. - In this case, the reserve ratio is 10%. 2. Calculating the Required Reserves: - To determine the required reserves, we multiply the deposit amount by the reserve ratio. - Required Reserves = Deposit Amount × Reserve Ratio - Required Reserves = $[/tex]10,000 × 0.10 = [tex]$1,000 3. Amount Available for Loans: - The bank can loan out the remaining amount after setting aside the required reserves. - Loanable Amount = Deposit Amount - Required Reserves - Loanable Amount = $[/tex]10,000 - [tex]$1,000 = $[/tex]9,000

Therefore, with a new deposit of [tex]$10,000 and a 10% reserve ratio, the bank would be able to loan out $[/tex]9,000.

The correct answer is:
B. $9,000
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