(Table) SCENARIO: Assume that the Empathy State Bank begins with the balance sheet below and is fully loaned up. If this bank is subject to a reserve requirement of 5%, what is the amount of its excess reserves?
A) $2,500
B) $5,000
C) $10,000
D) Negative. This bank does not have excess reserves; it needs $2,500 to meet its reserve requirement.

Question

(Table) SCENARIO: Assume that the Empathy State Bank begins with the balance sheet below and is fully loaned up. If this bank is subject to a reserve requirement of 5%, what is the amount of its excess reserves? 
A) $2,500 
B) $5,000 
C) $10,000 
D) Negative. This bank does not have excess reserves; it needs $2,500 to meet its reserve requirement.

Quizplus · Accepted Answer

The Answer of (Table) SCENARIO: Assume that the Empathy State Bank begins with the balance sheet below and is fully loaned up. If this bank is subject to a reserve requirement of 5%, what is the amount of its excess reserves? 
A) $2,500 
B) $5,000 
C) $10,000 
D) Negative. This bank does not have excess reserves; it needs $2,500 to meet its reserve requirement.

(Table) SCENARIO: Assume That the Empathy State Bank Begins with the Balance