If the reserve ratio is 25 percent, what level of excess reserves does a bank acquire when a customer deposits a $12,000 check drawn on another bank?
A) $3,000
B) $6,000
C) $9,000
D) $12,000

Question

Quizplus · Accepted Answer

When a customer deposits a $12,000 check, the bank must keep 25% (or $3,000) as required reserves. The remaining $9,000 is excess reserves, which the bank can lend out.

If the Reserve Ratio Is 25 Percent, What Level of Excess