The Table Below Shows the Balance Sheet of Eubank Which

question 76

Multiple Choice

The table below shows the balance sheet of Eubank which holds no excess reserves.Assume that the required reserve ratio is 10%.If a student deposits $10,000 in cash into his checkable deposit account,Eubank will have _____ in excess reserves?
Table 14.1
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EUBANK
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$$\begin{array} { | l | r | r | r | } \hline \text { Assets } & { \text { Liabilities and Net Worth } } & \\\hline & & & \\\hline \text { Deposits at the Fed } & \$ 40,000 & \text { Checkable deposits } & \$ 500,000 \\\hline \text { Cash } & \$ 10,000 & \text { Net Worth } & \$ 20,000 \\\hline \text { Loans } & \$ 300,000 & & \\\hline \text { Securities } & \$ 150,000 & & \\\hline \text { Fed Stock } & \$ 20,000 & & \\\hline\end{array}$$

• A)$10,000
• B)$1,000
• C)$9,000
• D)$60,000
• E)$6,000

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