(Table) SCENARIO: Assume that the Empathy State Bank begins with the balance sheet below and is fully loaned up.A bank has $50,000 in deposits from its checking account customers and loans of $49,000. Of the $49,000 loaned out,
$43,000 had remained in the checking accounts of the loan recipients but it now has been converted to cash by the loan
recipients. The bank had $50,000 cash on hand prior to the remaining loan proceeds being converted to cash, and the
reserve requirement is 25%. The reserve ratio for this bank after the remaining loan proceeds are converted to cash is
%, and it, , meeting its reserve requirement.
14 ; is not
53.76 ; is
0.002 ; is not
20 ; is
What is the amount of this bank's reserves?
Empathy State Bank
$2,500
$7,500
$10,000
$100,000
A bank has $50,000 in deposits from its checking account customers and loans of $49,000. Of the $49,000 loaned out,
$43,000 had remained in the checking accounts of the loan recipients but it now has been converted to cash by the loan
recipients. The bank had $50,000 cash on hand prior to the remaining loan proceeds being converted to cash, and the
reserve requirement is 25%. The reserve ratio for this bank after the remaining loan proceeds are converted to cash is
%, and it, O 14; is not
meeting its reserve requirement.
53.76; is
O 0.002; is not
O 20; is
