Assume that the required reserve ratio is 10 percent. A bank has deposits of $1,000,000 and cash of $500,000 in the Fed. The bank has demand deposits equal to $1,500,000. Given this information, the bank has excess reserves of
A) $850,000.
B) $350,000.
C) $1,350,000.
D) None of the above.
Correct Answer:
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