Final answer:
After a $12,000 deposit, a bank with a 10 percent reserve requirement must hold $1,200 in reserves and can lend out the remaining $10,800, increasing its loan capacity by that amount.
Step-by-step explanation:
The question is about how a bank's loan capacity is affected when an individual deposits money, given a certain reserve requirement set by the Federal Reserve. If an individual deposits $12,000 in a commercial bank and the bank is required to hold 10 percent as reserves, it must retain $1,200 (10% of $12,000) and can lend out the remaining amount. This means the loan capacity of the bank would increase by $10,800 (90% of $12,000), since this is the amount available for the bank to loan out after holding the required reserves. The correct answer is B. $10,800.