Given the following information about Gotham Bank: $\begin{array}{lr}
\text { Bank Deposits } & \$ 50,000 \
\text { Loans } & 34,000 \
\text { Reserves } & 12,000 \
\text { Reserve Requirement } & 20 \text { percent }
\end{array}$
Gotham Bank is holding _______ in excess reserves.
A)$22,000
B)$12,000
C)$2,000
D)-$2,000

Question

Given the following information about Gotham Bank: $\begin{array}{lr}
\text { Bank Deposits } & \$ 50,000 \
\text { Loans } & 34,000 \
\text { Reserves } & 12,000 \
\text { Reserve Requirement } & 20 \text { percent }
\end{array}$
 Gotham Bank is holding _______ in excess reserves.
A)$22,000
B)$12,000
C)$2,000
D)-$2,000

Quizplus · Accepted Answer

The required reserves are 20% of $50,000, which is $10,000. Since the bank has $12,000 in reserves, the excess reserves are $12,000 - $10,000 = $2,000.

Given the Following Information About Gotham Bank Gotham Bank Is Holding _______ in Excess Reserves