A local commercial bank has $10 million in deposits. According to the reserve requirement set by the central bank, the bank must hold 10% of these deposits in reserve. If the bank decides to lend out the maximum amount possible while adhering to this requirement, how much money can it lend to borrowers?

A commercial bank must keep a certain percentage of its deposits as reserves, which means it cannot lend out that money. In this case, the bank has $10 million in deposits and must hold 10% of that in reserve. To find out how much money that is, we calculate 10% of $10 million, which is $1 million. This means the bank can keep $1 million in reserve and lend out the remaining amount, which is $10 million minus $1 million, equaling $9 million. Therefore, the bank can lend a maximum of $9 million to borrowers while still meeting the reserve requirement.