If excess reserves in the banking system are $4,000, checkable deposits are $40,000, and the legal reserve ratio is 10 percent, then actual reserves are:

Name: If excess reserves in the banking system are $4,000, checkable deposits are $40,000, and the legal reserve ratio is 10 percent, then actual reserves are:
Brand: Quizplus
Rating: 4.7 (55 reviews)

Question

Quizplus · Accepted Answer

The required reserves are 10% of $40,000, which is $4,000. Since excess reserves are $4,000, the actual reserves are $4,000 (required) + $4,000 (excess) = $8,000.

If Excess Reserves in the Banking System Are $4,000, Checkable