Use the following balance sheet for the ABC National Bank in answering the question. Assume the required reserve ratio is 20 percent.
Liabilities and Net Worth
Demand deposits........
Capital Stock.
Assets
Reserves. ...... $38,000
41,000
31,000
Property............ 200.000
Assume that this bank makes a loan of the maximum amount it can prudently make, If the bank has a check cleared against it for the amount of t
uses the funds and they end up in another bank), its reserves and demand deposits will now be:
a. $24,000 and $120,000 respectively.
Loans
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Securities
b. $26,000 and $130,000 respectively.
c. $50,000 and $130,000 respectively.
d. $38,000 and $118,000 respectively.
e. $22,000 and $110,000 respectively.
. $130,000
180,000
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