Consider a bank with the following balance sheet Assets Liabilities Reserves $100 million þeposits $600 million Loans $700 million Bank capital $200 million If the bank suffers a deposit outflow of $99 million and the bank has a required reserve ratio on deposits of 10%, how much is the banks shortfall in reserves?

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter25: Money, Banking, And The Federal Reserve System
Section: Chapter Questions
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Consider a bank with the following balance sheet:
Assets
Liabilities
Reserves
$100 million
þeposits
$600 million
Loans
$700 million Bank capital $200 million
If the bank suffers a deposit outflow of $99 million and the bank has a required reserve ratio on deposits of 10%, how much is the banks shortfall in reserves?
Transcribed Image Text:Consider a bank with the following balance sheet: Assets Liabilities Reserves $100 million þeposits $600 million Loans $700 million Bank capital $200 million If the bank suffers a deposit outflow of $99 million and the bank has a required reserve ratio on deposits of 10%, how much is the banks shortfall in reserves?
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