Reference no: EM132248011 
                                                                               
                                       
Consider the following accounts of the First National Bank.
Assets          $mn                                                                                      Liabilities             $mn
--------------------------------------------------------------------------------------------------------
Reserves                                    20                                          Deposits                             90
Loans                                           80                                          Share Capital                     10
--------------------------------------------------------------------------------------------------------
Required reserve ratio imposed by the Fed is 10%.
a. If the Bank experiences a deposit outflow of $15 mn,
a. What is the new level of deposits?
b. What is the new level of reserves?
c. What is the resulting reserve ratio?
b. If it is less than 10%, what can the Bank do to bring in reserves?