Question

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

Answer 1

Answer:e 4500

Step-by-step explanation:

Answer 2

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.