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The bank you manage has the following balance sheet: Assets Liabilities Reserves $15 million Deposits $100 million Loans $105 million Bank capital $20 million Suppose
The bank you manage has the following balance sheet: Assets Liabilities Reserves $15 million Deposits $100 million Loans $105 million Bank capital $20 million Suppose that now the bank suffers a deposit outflow of $10 million with a required ratio on deposits of 10%, (a) What is a new level of reserves after the deposit outflow of $10 million? (b) What is a new level of required reserves after the deposit outflow of $10 m (c) What actions would enable you to satisfy the new level of required reserve Then take one action and explain it in detail
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