The excess reserves for a bank with demand deposits totaling $200 million, actual reserves of $30 million and a reserve requirement of 10% are:

Question

Quizplus · Accepted Answer

The excess reserves are calculated as the actual reserves minus the required reserves. The required reserves are 10% of $200 million, which is $20 million. The actual reserves are $30 million. Therefore, the excess reserves are $30 million - $20 million = $10 million.

The Excess Reserves for a Bank with Demand Deposits Totaling