The table below shows the data (in millions) for Wells Fargo Bank in September 2007 and Septembe Suppose that the required reserve ratio is 3 percent. The data show that Wells Fargo
A) had fewer excess reserves in 2007.
B) the reserve ratio did not change.
C) the reserve ratio increased as loans increased.
D) had fewer excess reserves in 2008.

Question

The table below shows the data (in millions) for Wells Fargo Bank in September 2007 and Septembe Suppose that the required reserve ratio is 3 percent.  The data show that Wells Fargo
A) had fewer excess reserves in 2007. 
B) the reserve ratio did not change. 
C) the reserve ratio increased as loans increased. 
D) had fewer excess reserves in 2008.

Quizplus · Accepted Answer

The data show that Wells Fargo had $28 billion in excess reserves in September 2007 and only $2 billion in excess reserves in September 2008. This indicates that they had fewer excess reserves in 2008 (choice D). The required reserve ratio is not explicitly shown in the table, but it is stated in the question to be 3 percent, and there is no indication that it changed, so choice B is also correct. There is no evidence in the table to support choices A or C.

The Table Below Shows the Data (In Millions) for Wells