Assume that Atlantic National Bank has demand deposits of $100,000 and no excess reserves, and that the reserve requirement is 10 percent. A customer withdraws $5,000 from the bank. To meet the reserve requirement, the bank must increase its reserves by

(A) $500

(B) $1,000

(C) $2,000

(D) $4,000

(E) $4,500

why

Question

Business

Maeve Padilla

12 January, 05:56

Assume that Atlantic National Bank has demand deposits of $100,000 and no excess reserves, and that the reserve requirement is 10 percent. A customer withdraws $5,000 from the bank. To meet the reserve requirement, the bank must increase its reserves by

(A) $500

(B) $1,000

(C) $2,000

(D) $4,000

(E) $4,500

why

+3

Answers (1)

Know the Answer?

Lance Riggs · Answer 1

The correct answer for the question that is being presented above is this one: " (C) $2,000." Atlantic National Bank has demand deposits of $100,000 and no excess reserves, and that the reserve requirement is 10 percent. A customer withdraws $5,000 from the bank. To meet the reserve requirement, the bank must increase its reserves by $2,000.