$$\begin{array} { | l | r | r | r | }
\hline & & \text { Assets } & \text { Liabilities and Net Worth } \
\hline \text { Stock Shares } & \$ 400 & & \
\hline \text { Reserves } & 40 & & \
\hline \text { Property } & 300 & & \
\hline \text { Securities } & 160 & & \
\hline \text { Loans } & 80 & & \
\hline \text { Demand Deposits } & 180 & & \
\hline
\end{array}$$ The ?gures in the table are for a single commercial bank. All ?gures are in thousands of dollars. If the required reserve ratio is 10 percent, the bank has excess reserves of
A) $28,000.
B) $22,000.
C) $18,000.
D) $16,000.

Question

$$\begin{array} { | l | r | r | r | } 
\hline & & \text { Assets } & \text { Liabilities and Net Worth } \
\hline \text { Stock Shares } & \$ 400 & & \
\hline \text { Reserves } & 40 & & \
\hline \text { Property } & 300 & & \
\hline \text { Securities } & 160 & & \
\hline \text { Loans } & 80 & & \
\hline \text { Demand Deposits } & 180 & & \
\hline
\end{array}$$ The ?gures in the table are for a single commercial bank. All ?gures are in thousands of dollars. If the required reserve ratio is 10 percent, the bank has excess reserves of
A) $28,000.
B) $22,000.
C) $18,000.
D) $16,000.

Quizplus · Accepted Answer

The bank's total reserves are $40,000 (from the "Reserves" row). The required reserves are calculated based on the demand deposits, which are $180,000. With a 10 percent reserve ratio, the required reserves are 10% of $180,000 = $18,000. The excess reserves are the total reserves minus the required reserves: $40,000 - $18,000 = $22,000.

The ?Gures in the Table Are for a Single Commercial