d. What could the bank do to restore reserve in order to fulfill reserve requirement after the withdrawal? (8 marks)

The following is the balance sheet of a hypothetical bank. Reserve requirement is 10%. Reserves Loans Securities Assets $10 million $80 million $10 million Deposits Bank capital Liabilities $90 million $10 million a. What is asset transformation in commercial banking? (5 marks) b. What would happen to the balance sheet immediately after a $10 million withdrawal from the bank? Show the change in a T-account. (3 marks) c. After the withdrawal, what is the discrepancy between actual reserve and required reserve? (4 marks)