7. Beleaguered Provincial Bank (BPB) holds $250 million in deposits and maintains a reserve ratio of 10 percent.

a. Show a T-account for BPB.

b. Now suppose that BPB's largest depositor withdraws $10 million in cash from her account. If BPB decides to restore its reserve ratio by reducing the amount of loans outstanding, show its new T-account.

c. Explain what effect BPB's action will have on other banks.

d. Why might it be difficult for BPB to take the action described in part (b)? Discuss another way for BPB to return to its original reserve ratio.