(Answered) Bank has the following balance sheet bank has the following

Economics

Bank has the following balance sheet. Bank has the following balance sheet. Reserves = $760, Loans = $7,800, T-bills = $560, Deposits = $8,000, and Debt = $800. Reserve requirement is 8%. Suppose value of loans drops by 2%. How this even impacts bank's equity?

Decreases by 50%
Decreases by 63%
Increases by 50%
Increases by 63%

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