Suppose a bank has $100 million in chequable deposits and the desired reserve ratio is 0.1.And suppose the bank has $5 million in excess reserves.What are the bank's actual reserves?

Question

Quizplus · Accepted Answer

The bank's actual reserves are the sum of its required reserves and its excess reserves. Required reserves are 10% of $100 million, which is $10 million. Adding the $5 million in excess reserves gives a total of $15 million in actual reserves.

Suppose a Bank Has $100 Million in Chequable Deposits and the Desired