Suppose a bank has $850 million in vault cash and a deposit in the Fed of $100 million.If the bank's required reserves equal $500 million, then the bank has excess reserves of:

Question

Quizplus · Accepted Answer

The bank's total reserves are $850 million (vault cash) + $100 million (deposit in the Fed) = $950 million. The required reserves are $500 million, so the excess reserves are $950 million - $500 million = $450 million.

Suppose a Bank Has $850 Million in Vault Cash and a Deposit