A banking system has $200 billion in deposits and $50 billion in total reserves. The reserve requirement is 20%. How much does the banking system have in excess reserves?
A) $150 billion
B) $70 billion
C) $40 billion
D) $10 billion

Question

Quizplus · Accepted Answer

The required reserves are 20% of $200 billion, which is $40 billion. The system has $50 billion in total reserves, so the excess reserves are $50 billion - $40 billion = $10 billion.

A Banking System Has $200 Billion in Deposits and $50