A bank has $132,000 in excess reserves and the required reserve ratio is 11 percent.This means the bank could have __________ in checkable deposit liabilities and __________ in (total)reserves.

Question

Quizplus · Accepted Answer

The bank's excess reserves are $132,000. With a required reserve ratio of 11%, the bank's total reserves must be $869,000 to support $4,700,000 in checkable deposit liabilities, as 11% of $4,700,000 is $517,000, and $869,000 - $517,000 = $352,000, which includes the $132,000 in excess reserves.

A Bank Has $132,000 in Excess Reserves and the Required