The following table shows a T-account for Bank A in a new economy.

-Refer to the table above.If the required reserve ratio is 5 percent,how much is Bank A currently holding in excess reserves?

Question

The following table shows a T-account for Bank A in a new economy.
 
-Refer to the table above.If the required reserve ratio is 5 percent,how much is Bank A currently holding in excess reserves?

Quizplus · Accepted Answer

Excess reserves = Required reserves - Actual reservesRequired reserves = 5% * $20,000 = $1,000Actual reserves = $200Excess reserves = $1,000 - $200 = $800

The Following Table Shows a T-Account for Bank a in a New