Question

If the bank suffers a deposit outflow of​ $50 million with a required reserve ratio on deposits of​ 10%, what actions can you take to keep your bank from​ failing?

a. you can go to the discount window.
b. you can borrow reserves in the federal funds market.
c. you can call in or sell off loans.
d. any of the above are appropriate actions to take.

Answer 1

To keep your bank from failing if the bank suffers a deposit outflow of $50 million with a required reserve ratio on deposits of 10%, any of the following actions can be use:

1. You can call in or sell off loans

2.You can go to the discount window

3. You can borrow reserves in the federal funds market