Exhibit 15-1 Balance sheet of First Iliad State Bank
Assets
Liabilities
Required reserves$ 1,000,000
Demand deposits$10,000,000
Excess reserves0
Loans$
In Exhibit 15-1, if the required reserve ratio is raised to 15 percent, First Iliad State will have to convert loans worth:
A. $9,000,000 to required reserves.
B. $1,500,000 to required reserves.
C. $500,000 to required reserves.
D. $1,000,000 to required reserves.
Answer: C
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