Rosa banks with Olympia Credit Union and Rosa’s employer uses Washington National Bank. Rosa receives a salary of $2,500 every month which is directly deposited into her checking account. Assume that banks are required to maintain a 10% reserve ratio.
a. Explain how this affects Olympia Credit Union’s assets and liabilities (including required and excess reserves), at the beginning of every month.
b. Explain how this affects Washington National Bank’s assets and liabilities at the beginning of every month.