The reserve ratio is 10 percent. If the bank receives a customer deposit of $100,000, then an immediate effect is

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The reserve ratio is 10%, which means that the bank must hold 10% of the $100,000 deposit, or $10,000, in reserves. Therefore, when the bank receives the $100,000 deposit, its total assets will increase by $100,000 and its total liabilities will also increase by $100,000 (as the deposit is a liability to the bank). However, the bank needs to hold $10,000 in reserves, so it will immediately set aside this amount, which will increase its reserves by $10,000. As a result, the bank's total assets will increase by $100,000 and its reserves will increase by $10,000, but there will be no change in its total liabilities.

The Reserve Ratio Is 10 Percent