-In the balance sheet above, the entries are in millions of dollars for the FBN Bank. If the desired reserve ratio equals 10 percent, FBN Bank has excess reserves of
A) $280 million.
B) $100 million.
C) $200 million.
D) $0.

Question

-In the balance sheet above, the entries are in millions of dollars for the FBN Bank. If the desired reserve ratio equals 10 percent, FBN Bank has excess reserves of
A) $280 million. 
B) $100 million. 
C) $200 million. 
D) $0.

Quizplus · Accepted Answer

Excess reserves = Required reserves - Actual reservesRequired reserves = 10% of Deposits = 10% of $2,800 million = $280 millionActual reserves = $100 millionExcess reserves = $280 million - $100 million = $180 million

-In the Balance Sheet Above, the Entries Are in Millions