Question

if the reserve rate is 10% and a bank receives a deposit of $320,000, how much of the $320,000 is the bank free to loan out?

Answer 1

I could be wrong in thinking like this but I always thought that if the reserve deposit ratio is 10% then the amount of money the bank can loan out is 90% of that money. So with that in mind, my original thought was 90% of the 320 000 which is 288 000

Answer 2

Thanks :)