Question

If the reserve ratio was 10% for the bank with the balance sheet listed below, then...

If the reserve ratio was 10% for the bank with the balance sheet listed below, then this bank is being


Assets Liabilities & Net Worth
Reserves $2,500,000 Checking deposits $5,000,000
Loans Outstanding $2,000,000
Total $5,500,000 Net Worth
Stockholders' Equity    $500,000
Total $5,500,000
a.

cautious as indicated by a small amount of excess reserves.

b.

aggressive as indicated by a large amount of excess reserves.

c.

cautious as indicated by a large amount of excess reserves.

d.

aggressive as indicated by a small amount of excess reserves.

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