Table 29-4

-Refer to Table 29-4.If the Fed requires banks to hold 5 percent of deposits as reserves,how much in excess reserves does the Bank of Tampa now hold?
A)$25
B)$50
C)$55
D)$75

Question

Table 29-4
 
-Refer to Table 29-4.If the Fed requires banks to hold 5 percent of deposits as reserves,how much in excess reserves does the Bank of Tampa now hold?
A)$25 
B)$50 
C)$55 
D)$75

Quizplus · Accepted Answer

To determine excess reserves, calculate required reserves (5% of deposits) and subtract from total reserves. If deposits are $1,000, required reserves are $50. If total reserves are $100, excess reserves are $50.

Table 29-4 -Refer to Table 29-4.If the Fed Requires Banks to Hold