Question

Suppose that you deposit $4,500 in your bank and the required reserve ratio is 18 percent. the maximum loan your bank can make as a direct result of your deposit is:___________

Answer 1

Suppose that you deposit $4,500 in your bank and the required reserve ratio is 18 percent. The maximum loan your bank can make as a direct result of your deposit is 3690.

What exactly is a bank loan and the required reserve ratio?

• A loan is a quantity of money that one or more people or businesses obtain from banks or other financial organizations in order to handle their finances in connection with anticipated or unforeseen circumstances.
• By doing this, the borrower creates a debt that must be repaid with interest within a predetermined time frame.
• The percentage of deposits that authorities mandate a bank maintain in reserves and refrain from lending out is known as the required reserve ratio.
• If the required reserve ratio is 1 to 10, a bank can only lend out $0.90 of every dollar it has on deposit, but it must retain $0.10 in reserves.

Hence, The maximum loan your bank can make as a direct result of your deposit is 3690.

To learn more about the loan, refer to the following link:

brainly.com/question/25599836

#SPJ4