Table 11-4. -Refer to Table 11-4. Suppose the Bank Faces a Reserve

Multiple Choice

Table 11-4.

-Refer to Table 11-4. Suppose the bank faces a reserve requirement of 10 percent. Starting from the situation as depicted by the T-account, a customer deposits an additional $50,000 into his account at the bank. If the bank takes no other action it will

A) have $65,000 in excess reserves.
B) have $55,000 in excess reserves.
C) need to raise an additional $5,000 of reserves to meet the reserve requirement ratio
D) None of the above is correct.