(Table) SCENARIO: Assume That Empathy State Bank Begins with the Balance

Multiple Choice

(Table) SCENARIO: Assume that Empathy State Bank begins with the balance sheet shown and is fully loaned-up. If this bank is subject to a reserve requirement of 5%, what is the amount of its excess reserves?

A) $2,500
B) $5,000
C) $10,000
D) Negative. This bank does not have excess reserves; it needs $2,500 to meet its reserve requirement.