Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and demand deposits are the only form of...

Assume we have a simplified banking system in

balance-sheet equilibrium. Also assume that all

banks are subject to a uniform 10 percent reserve

requirement and demand deposits are the only form

of money. A commercial bank receiving a new

demand deposit of $100 would be able to extend

new loans in the amount of

a. $10.

b. $90.

c. $100.

d. $1,000.