Table 10-4
The following information pertains to the Bank of Kingston.

-Refer to the Table 10-4.If the Bank of Canada requires a reserve ratio of 4 percent,how much in excess reserves does the Bank of Kingston now hold?
A)$1200
B)$2400
C)$2880
D)$3000

Question

Table 10-4
The following information pertains to the Bank of Kingston.
 
-Refer to the Table 10-4.If the Bank of Canada requires a reserve ratio of 4 percent,how much in excess reserves does the Bank of Kingston now hold?
A)$1200 
B)$2400 
C)$2880 
D)$3000

Quizplus · Accepted Answer

To find excess reserves, we subtract required reserves from total reserves:
Excess reserves = Total reserves - Required reserves
= $64,000 - (4% x $1,600,000)
= $64,000 - $64,000
= $2,400
Therefore, the correct answer is B) $2400.

Table 10-4 The Following Information Pertains to the Bank of Kingston