Suppose a bank has $300,000 in deposits, a reserve ratio of 5 percent, and bank reserves of $45,000. This bank can make new loans in the amount of:

A) $345,000.
B) $45,000.
C) $30,000.
D) $15,000.

ANSWER:

5% of 300,000 = 15,000
45,000 – 15,000 = $30,000