A banking system has $900 billion in deposits and $20 billion in excess reserves. The reserve requirement is 10%. How much does the banking system have in total reserves?
A) $110 billion
B) $90 billion
C) $22 billion
D) $2 billion

Question

Quizplus · Accepted Answer

The total reserves can be calculated by adding the excess reserves to the required reserves. The required reserves are 10% of $900 billion, which is $90 billion. Adding the excess reserves of $20 billion gives a total of $110 billion.

A Banking System Has $900 Billion in Deposits and $20