If a customer makes new deposits of $10,000 to a bank and the reserve requirement is 15%, then excess reserves will be

Question

Quizplus · Accepted Answer

Excess reserves are calculated by subtracting the required reserves from the total deposits. In this case, the required reserves for a deposit of $10,000 with a reserve requirement of 15% would be $1,500 (10,000 x 0.15). Therefore, the excess reserves would be $8,500 (10,000 - 1,500).

If a Customer Makes New Deposits of $10,000 to a Bank