Solved: Main street bank sets its loans on the basis of a 5 reserve, Microeconomics

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Main street bank sets its loans on the basis of a 5 reserve

1. Main Street Bank sets its loans on the basis of a 5% reserve requirement and has $100 million cash in its vaults.

2. What is the maximum amount of loans the bank can make?

3. If the bank has made loans of $50 million to real estate ?rms and is required to keep a 50% reserve requirement against such loans, how does this change your answer?

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Microeconomics: Main street bank sets its loans on the basis of a 5 reserve

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Microeconomics: Main street bank sets its loans on the basis of a 5 reserve

Reference No:- TGS01181193

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