A depositor places $5,000 in cash in a commercial bank, and the reserve ratio is 20 percent; the bank sends the $5,000 to the Federal Reserve Bank.As a result, the reserves and excess reserves of the bank have been increased by

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The bank's reserves increase by the full $5,000 deposit. With a 20% reserve ratio, the required reserves are $1,000 (20% of $5,000), leaving $4,000 as excess reserves.

A Depositor Places $5,000 in Cash in a Commercial Bank