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A commercial bank has actual reserves of $17,000 and checkable-deposit liabilities of $14,000, and the required reserve ratio

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Answer #1

A bank can loan out olny its excess reserve out of its total reserve

Excess reserves = Actual reserves - Required reserves

Required reserves = Reserve ratio * checkable depsits

Reserve ratio = 0.15 or 15%

Required reserves = 15% * $14,000 = $2,100

Actual reserves = $17,000

Exess reserve = 17,000 - 2100

= $14,900

So the bank can loan out $14,900

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