Assume that Atlantic National Bank has demand deposits of $100,000 and no excess reserves, and that the reserve requirement is 10 percent. A customer withdraws $5,000 from the bank. To meet the reserve requirement, the bank must increase its reserves by
(A) $500
(B) $1,000
(C) $2,000
(D) $4,000
(E) $4,500
why
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