Suppose that the Bank of Oranges has excess reserves of $80,000,000 and checkable deposits of $500,000,000.If the bank has a reserve requirement of 10 percent,what is the bank's total amount of reserves?

Question

Quizplus · Accepted Answer

The bank's total reserves are the sum of required reserves and excess reserves. Required reserves are 10% of checkable deposits, which is $50,000,000. Adding the excess reserves of $80,000,000 gives a total of $130,000,000.

Suppose That the Bank of Oranges Has Excess Reserves of $80,000,000