Refer to the information provided in Table 25.4 below to answer the question(s) that follow.
Table 25.4
-Refer to Table 25.4. If the required reserve ratio were changed to 5% and First Charter Bank continues to hold $1,200,000 in reserves, its excess reserves will be

Question

Refer to the information provided in Table 25.4 below to answer the question(s) that follow.
Table 25.4 
-Refer to Table 25.4. If the required reserve ratio were changed to 5% and First Charter Bank continues to hold $1,200,000 in reserves, its excess reserves will be

Quizplus · Accepted Answer

If the required reserve ratio is 5%, the required reserves are 5% of $8,000,000 (total deposits), which is $400,000. With $1,200,000 in reserves, the excess reserves are $1,200,000 - $400,000 = $800,000.

Refer to the Information Provided in Table 25