If a bank has customer deposits of $150 million, $15 million in reserves and the amount of excess reserves equals 0 (zero):

Question

Quizplus · Accepted Answer

To determine the required reserve rate, we need to calculate the total reserves required for the given customer deposits.

Reserves Required = Required Reserve Ratio x Customer Deposits
Reserves Required = R x $150 million

Since we know that the excess reserves are zero, it means that the reserves available ($15 million) are equal to the reserves required.

Reserves Available = Reserves Required
$15 million = R x $150 million
R = 0.10 or 10%

Therefore, the required reserve rate is 10 percent.

If a Bank Has Customer Deposits of $150 Million, $15