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Bank 1 has deposits of $5,438 and reserves of $1,081. If the required
reserve ratio is 10%, then what is the largest loan the bank can make?
Enter a whole number with no dollar sign. Round to the nearest whole
number.

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Based on the amount the bank has as deposits and reserves and the reserve ratio, the highest loan it can make is $537.20.

The largest loan a bank can make is:

= Total reserves - Required reserves

Required reserves:

= Deposits x Reserve ratio

= 5,438 x 10%

= $543.80

Largest loan:

= 1,081 - 543.80

= $537.20

Largest loan this bank can make is $537.20.

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