cfa level I economics page 39 q2

the amount of new money that can be created by  a commercial bank is most likely limited by the amount of that bank's

a.actual reserves

b.excess reserves;

c.required reserves.

the answer is b,why not c?

who can interpret it for me ?thanks.

 Banks lend excess reserves to creat money.

require reserve：比如存入100块，require reserve ratio是25%，那么25块必须存入FED，75块作为loanable fund，如果commercial bank只loan出去70块，那么剩余的5块就是excess reserve，也可以存入

FED。因此commercial bank要想creat new money只能依靠那5块来贷款。