(Answered) Suppose that the first national bank has the following

Economics

Suppose that the First National Bank has the following balance sheet position and that the required reserve ratio is 15 percent.

Assets

Liabilities

Reserves

$40 million

Deposits

$200 million

Loans

$160 million

Bank Capital

$20 million

Securities

$20 million

What are the bank's a) required reserves and b) excess reserves?

If the bank was hit with a deposit outflow of $20 million, would it have to make an adjustment to the balance sheet? Why or why not?

If the bank has to make an adjustment to its balance sheet, what are its options? Explain?

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Business Economics, Economics

Category:- Business Economics
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