CE 09-39

Below is the balance sheet of a banking system which has $50 excess reserves.

Suppose all banks lend out their excess reserves and all loans will be redeposited into the banking system. After the deposit creation process is completed, the amount of reserves held by banks would be __________ and the amount of loans would be __________.

A. $300 … $1 400

B. $300 … $1 100

C. $350 … $1 400

D. $350 … $1 050