(Table) SCENARIO: Assume that Empathy State Bank begins with the balance sheet shown and is fully loaned-up. Vanessa has a checking account at Empathy State Bank. If she writes a check for $5,000 to pay for her new car and if the bank has a reserve requirement of 5%, this bank's excess reserves will be
A) $250.
B) $5,250.
C) $0; Empathy State Bank will be fully loaned-up.
D) negative; Empathy State Bank will need to acquire $2,250 in reserves.

Question

(Table) SCENARIO: Assume that Empathy State Bank begins with the balance sheet shown and is fully loaned-up. Vanessa has a checking account at Empathy State Bank. If she writes a check for $5,000 to pay for her new car and if the bank has a reserve requirement of 5%, this bank's excess reserves will be 
A) $250. 
B) $5,250. 
C) $0; Empathy State Bank will be fully loaned-up. 
D) negative; Empathy State Bank will need to acquire $2,250 in reserves.

Quizplus · Accepted Answer

The Answer of (Table) SCENARIO: Assume that Empathy State Bank begins with the balance sheet shown and is fully loaned-up. Vanessa has a checking account at Empathy State Bank. If she writes a check for $5,000 to pay for her new car and if the bank has a reserve requirement of 5%, this bank's excess reserves will be 
A) $250. 
B) $5,250. 
C) $0; Empathy State Bank will be fully loaned-up. 
D) negative; Empathy State Bank will need to acquire $2,250 in reserves.

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