Assume that Atlantic National Bank has demand deposits of $100,000 and no excess reserves, and that the reserve requirement is 10 percent. A customer withdraws $5,000 from the bank. To meet the reserve requirement, the bank must increase its reserves by(A) $500(B) $1,000(C) $2,000(D) $4,000E $4,500 42. Assume that Atlantic National Bank has demanddeposits of $100,000 and no excess reserves,and that the reserve requirement is 10 percent.A customer withdraws $5,000 from the bank.To meet the reserve requirement, the bank mustincrease its reserves by(A) $500(B) $1,000(C) $2,000(D) $4,000(E) $4,500

The reserve requirement is the percentage of deposits that banks and other financial institutions…

reserve requirement is 10 percent. A customer withdraws $5,000 from the bank. To meet the reserve requirement, the bank must increase its reserves by (A) $500 (B) $1,000 (C) $2,000 (D) $4,000 E $4,500

reserve requirement is 10 percent. A customer withdraws $5,000 from the bank. To meet the reserve requirement, the bank must increase its reserves by (A) $500 (B) $1,000 (C) $2,000 (D) $4,000 E $4,500

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter16: Information, Risk, And Insurance

Section: Chapter Questions

Problem 8RQ: What are some ways that someone looking for a loan might reassure a bank that is faced with...

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Question

Assume that Atlantic National Bank has demand deposits of $100,000 and no excess reserves, and that the reserve requirement is 10 percent. A customer withdraws $5,000 from the bank. To meet the reserve requirement, the bank must increase its reserves by

(A) $500

(B) $1,000

(D) $4,000

E $4,500

42. Assume that Atlantic National Bank has demand
deposits of $100,000 and no excess reserves,
and that the reserve requirement is 10 percent.
A customer withdraws $5,000 from the bank.
To meet the reserve requirement, the bank must
increase its reserves by
(A) $500
(B) $1,000
(C) $2,000
(D) $4,000
(E) $4,500

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