Table 3 Hometown Bank Assets Liabilities Reserves $25,000 Deposits $150,000 Loans $125,000 Refer to Table 3. If the reserve requirement is 25 percent, this bank
A. has $10,000 of excess reserves.
B. needs $12,500 more reserves to meet its reserve requirements.
C. needs $2,500 more reserves to meet its reserve requirements.
D. just meets its reserve requirement.
Answer: B. needs $12,500 more reserves to meet its reserve requirements.
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