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QUESTION 6 LAST NATIONAL BANK BALANCE SHEET ASSETS LIABILITIES & NET WORTH cash in the vault: $300,000 demand deposits: $3,000,000 deposit at the Fed $100,000
QUESTION 6 LAST NATIONAL BANK BALANCE SHEET ASSETS LIABILITIES & NET WORTH cash in the vault: $300,000 demand deposits: $3,000,000 deposit at the Fed $100,000 US treasury bonds: $300,000 loans: $1,900,000 building: $1,000,000 capital stock: $600,000 TOTALS: $3,600,000 TOTALS: $3,600,000 "Assuming the required reserve ratio is 20%, and the bank has only days to bring its reserves up to the required level, which of the following would be effective actions for the bank to take "The only thing needed is to stop lending and wait for loan repayments to restore reserves" Sell liquid assets such as loans and US Treasury bonds See the bank building Create more money by making more loans Borrow reserves from other banks
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