If a bank's required reserves decrease due to a change in monetary policy, how will this likely impact its T-account?

When a bank's required reserves decrease, it means that the bank has to keep less money on hand and can use more of its funds for loans or investments. In the T-account, which shows the bank's assets and liabilities, the decrease in required reserves will be reflected in the liabilities section. For example, if the required reserves drop by $10,000, this amount will reduce the reserves listed under liabilities. As a result, the bank can now increase its loans or other assets by the same amount, which will show an increase in the assets section of the T-account. This change allows the bank to become more active in lending, potentially leading to more money circulating in the economy.