Table 10-3
The following information pertains to the Bank of Edmonton.

-Refer to the Table 10-3.If the Bank of Canada requires banks to hold 5 percent of deposits as reserves,how much in excess reserves does the Bank of Edmonton now hold?
A)$5
B)$25
C)$50
D)$55

Question

Table 10-3
The following information pertains to the Bank of Edmonton.
 
-Refer to the Table 10-3.If the Bank of Canada requires banks to hold 5 percent of deposits as reserves,how much in excess reserves does the Bank of Edmonton now hold?
A)$5 
B)$25 
C)$50 
D)$55

Quizplus · Accepted Answer

The Bank of Edmonton has $100 in deposits and is required to hold 5% of that as reserves, which is $5. The bank currently holds $55 in reserves, so it has $55 - $5 = $50 in excess reserves.

Table 10-3 The Following Information Pertains to the Bank of Edmonton