The Table Given Below Shows the Assets and Liabilities of the National

The table given below shows the assets and liabilities of the National Bank. Assume that this is the only bank in the economy.
Table 13.2
$\begin{array}{c}\text { Balance Sheet of National Bank }\\\quad\quad\quad\text { Assets } \quad\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }\\\begin{array}{|c|c|c|c|}\hline\text { Vault Cash } & \$ 1,725 & \text { Deposits } & \$ 5,450 \\\text { Deposit in Fed } & \$ 425 & & \\\text { Loans } & \$ 3,300 & & \\\hline \text { Total Assets } & \$ 5,450 & \text { Total Liabilities } & \$ 5,450\\\hline\end{array}\end{array}$


-Refer to Table 13.2. Calculate the change in the bank's excess reserves if the reserve requirement is decreased from 10% to 5%.

A) +$272.5
B) +$236
C) -$2,360
D) -$1877.5
E) -$3,210

Correct Answer:

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