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citycyborg citycyborg
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2 months ago
The following table lists some statistics on Boring Bank.

CategoryAmount (dollars)
Reserves________
Demand deposits200
Long-term debt________
Cash equivalents80
Short-term borrowing95
Long-term investments230

Refer to the table above. If the required reserve ratio changes to 20 percent, and Boring Bank makes only the necessary changes to comply with regulations, how will the bank's total assets and total liabilities change?

▸ Both total assets and total liabilities will decrease by $20.

▸ Total assets will decrease by $20, and total liabilities will remain the same.

▸ Total assets will increase by $20, and total liabilities will decrease by $20.

▸ Both total assets and total liabilities will remain the same.
Textbook 
Macroeconomics

Macroeconomics


Edition: 3rd
Authors:
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mbiij16mbiij16
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Both total assets and total liabilities will remain the same.
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You make an excellent tutor!
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