Suppose a Bank Has the Following Balance Sheet If the Required Reserve Ratio Is 10 Percent,how Much Excess

question 212

Essay

Suppose a bank has the following balance sheet:
$$\begin{array} { | c | l | l } \hline{ \text { Assets } } & { \text { Liabilities } } \\\hline \text { Reserves } \$ 14,000 & \text { Deposits } \$ 100,000 \\\hline \text { Loans } \$ 90,000 & \text { Net Worth } \$ 4,000 \\\hline\end{array}$$
If the required reserve ratio is 10 percent,how much excess reserves does the bank have? What is the maximum amount that the bank can expand its loans?

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Definitions:

Proximity

The physical or psychological closeness between people, objects, or ideas, often influencing relationships and perceptions.

Physical Attractiveness

The degree to which a person's physical traits are considered aesthetically pleasing or beautiful by others.

Interpersonal Attraction

The force that draws people together, leading to friendships and romantic relationships, influenced by factors such as physical attractiveness, similarity, and proximity.

Reciprocal Liking

The tendency for people to like others who express liking for them, an important factor in the formation of interpersonal relationships and social bonding.