Question

Suppose the required reserve ratio is 8% and the Fed purchases $100 million worth of Treasury bills from Wells Fargo. By how much is Wells Fargo able to increase its loans? $8 million $92 million $100 million $1.25 billion

Answer 1

$92 million

Step-by-step explanation:

Money received from central bank - reserve = 100 million - 8 million

= $92 million

Therefore, By $92 million Wells Fargo able to increase its loans