Suppose a bank has $1,500,000 in deposits and the desired reserve ratio is 12 percent. If the bank is currently holding $200,000 in reserves, the excess reserves are equal to
A) $120,000.
B) $40,000.
C) zero.
D) $20,000.

Question

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The Answer of Suppose a bank has $1,500,000 in deposits and the desired reserve ratio is 12 percent. If the bank is currently holding $200,000 in reserves, the excess reserves are equal to
A) $120,000.
B) $40,000.
C) zero.
D) $20,000.

Suppose a Bank Has $1,500,000 in Deposits and the Desired