A bank has a 10 percent reserve requirement, $4,000 in deposits, and has loaned out all it can, given the reserve requirement. (show your working out) (1 mark)
a.
It has $40 in reserves and $3,960 in loans.
b.
It has $400 in reserves and $3,600 in loans.
c.
It has $444 in reserves and $3,556 in loans.
d.
None of the above is correct.