If you deposit $300 in your bank and the required reserve ratio is 10%, your bank will have

Question

Quizplus · Accepted Answer

The required reserve ratio is the percentage of deposits that a bank must hold in reserve either in its vault or in its account with the central bank. In this case, the required reserve ratio is 10%, which means that the bank must hold 10% of the $300 deposit in reserve. 
Thus, the bank is required to hold $30 in reserves (10% of $300), and the remaining $270 is considered excess reserves, as they are not required to be held as reserves. Therefore, the answer is D, which states that the bank will have an increase in required reserves of $30 (10% of the deposit) and an increase in excess reserves of $270 (the remaining amount after the required reserves are taken out).

If You Deposit $300 in Your Bank and the Required