A banking system has $800 billion in deposits and a reserve requirement of 10%. Total reserves are $90 billion. How much does the banking system have in excess reserves?
A) $8 billion
B) $10 billion
C) $80 billion
D) $90 billion

Question

Quizplus · Accepted Answer

The reserve requirement is 10% of $800 billion, which equals $80 billion. Total reserves are $90 billion, so the excess reserves are $90 billion - $80 billion = $10 billion.

A Banking System Has $800 Billion in Deposits and a Reserve