1. Suppose $200,000 is deposited at a bank. The required reserve ratio is 10 percent, and the bank chooses not to hold any excess reserves but makes loans instead. What are thebank's totalreserves?

Total reserves are

2. Examples of off-balance-sheet activities Loading...include:

A.

borrowing from other banks

B.

selling loan portfolios

C.

extending loans to depositors

D.

selling negotiable CDs

3. What happens to reserves at the First National Bank if one person withdraws

$1,000 of cash and another person deposits $600 ofcash? Use aT-account to explain your answer.

TheT-account for First National Bankis:

Assets Liabilities

Reserves Checkable deposits

$ ---------nothing $ -----------nothing