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Assume the Trusty Bank's balance sheet is as follows: Assets Liabilities and Net Worth Reserves $35,000 Demand deposits $260,000 Loans 20,0000 Equity 50,000 Securities 75,000
Assume the Trusty Bank's balance sheet is as follows: Assets Liabilities and Net Worth Reserves $35,000 Demand deposits $260,000 Loans 20,0000 Equity 50,000 Securities 75,000 Refer to the information above to answer this question. If the bank's target reserve ratio is 10%, which of the following is correct? a. The bank is under-reserved by $9,000. b. The bank's reserves are in equilibrium. c. There are excess reserves of $9,000. d. There are excess reserves of $3,500
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