Question

Suppose a bank's balance sheet is as follows and banks are required to hold reserves equal to 20 percent of deposits: assets liabilities _______________________________________________________ reserves $2,700 deposits $7,20
a.does the bank hold excess reserves? if so, how much?
b.can this bank lend more? if so, how much?

Answer 1

Which of the following statements are true?
A) A bank's assets are its sources of funds.
B) A bank's liabilities are its uses of funds.
C) A bank's balance sheet shows that total assets equal total liabilities plus equity capital.
D) A bank's balance sheet indicates whether or not the bank is profitable.