Table 10.1
-Refer to Table 10.1.Suppose a transaction changes a bank's balance sheet as indicated in the T-account, and the desired reserve ratio is 10 percent.As a result of the transaction, the bank has excess reserves of

Question

Table 10.1 
-Refer to Table 10.1.Suppose a transaction changes a bank's balance sheet as indicated in the T-account, and the desired reserve ratio is 10 percent.As a result of the transaction, the bank has excess reserves of

Quizplus · Accepted Answer

Excess reserves can be calculated as:
Excess Reserves = Actual Reserves - Required Reserves
In this case, the actual reserves are $40,000 and the required reserves are $3,600 (10% of $36,000). Therefore, excess reserves are $40,000 - $3,600 = $36,400. However, since the question is asking for excess reserves as a result of a single transaction, we need to subtract the initial excess reserves of $400. Thus, the answer is $36,400 - $400 = $3,600.

Table 10.1 -Refer to Table 10.1.Suppose a Transaction Changes a Bank's Balance