$$\begin{array} { | l | l | }
\hline { \text { Assets } } &{ \text { Liabilities } } \
\hline \text { Reserves } & \text { Deposits } \
\$100& \$ 400 \
\text { Loans } & \text { Net Worth } \
\$ 600 & \$ 300 \
\text { Total } & \text { Total } \
\$ 700 & \$ 700 \
\hline
\end{array}$$
-The above table gives the initial balance sheet for Mini Bank.If the bank's desired reserve ratio is 10 percent,how much does this bank have in excess reserves?

Question

$$\begin{array} { | l | l | } 
\hline { \text { Assets } } &{ \text { Liabilities } } \
\hline \text { Reserves } & \text { Deposits } \
\$100& \$ 400 \
\text { Loans } & \text { Net Worth } \
\$ 600 & \$ 300 \
\text { Total } & \text { Total } \
\$ 700 & \$ 700 \
\hline
\end{array}$$
-The above table gives the initial balance sheet for Mini Bank.If the bank's desired reserve ratio is 10 percent,how much does this bank have in excess reserves?

Quizplus · Accepted Answer

The bank's desired reserves are 10% of deposits, which is $40 (10% of $400). Since the bank has $100 in reserves, the excess reserves are $100 - $40 = $60.

-The Above Table Gives the Initial Balance Sheet for Mini