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 bank's unplanned reserves are equal to
A) zero.
B) $180,000.
C) $120,000.
D) $20,000.

Question

Quizplus · Accepted Answer

The required reserves are 12% of $1,500,000, which is $180,000. Since the bank is holding $200,000 in reserves, the unplanned reserves are $200,000 - $180,000 = $20,000.

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