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Question: Suppose a bank has $1,000,000 in deposits, a minimum reserve requirement of 15 percent, and bank ...

Show transcribed image text Suppose a bank has $1,000,000 in deposits, a minimum reserve requirement of 15 percent, and bank reserves of $170,000. Then the bank can make new loans in the amount of: 1) $15,000. 2) $20,000. 3) $170,000. 4) $320,000.

Suppose a bank has $1,000,000 in deposits, a minimum reserve requirement of 15 percent, and bank reserves of $170,000. Then the bank can make new loans in the amount of: 1) $15,000. 2) $20,000. 3) $170,000. 4) $320,000.