If you deposit a $50 bill in a commercial bank that has a 10 percent legal reserve requirement, the bank will

Name: If you deposit a $50 bill in a commercial bank that has a 10 percent legal reserve requirement, the bank will
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The bank will have $45 of additional excess reserves because with a 10 percent reserve requirement, it needs to keep $5 (10% of $50) as required reserves, leaving $45 as excess reserves that can be used for lending or other purposes.

If You Deposit a $50 Bill in a Commercial Bank