TS&B Bank has deposits of $200 million, a reserve requirement of 20 percent, $50 million in actual reserves, and $6 million in other assets. Based on this information, TS&B:

Question

Quizplus · Accepted Answer

The reserve requirement is 20% of $200 million, which is $40 million. TS&B has $50 million in actual reserves, so it has $10 million in excess reserves, allowing it to make an additional $10 million in loans.

TS&B Bank Has Deposits of $200 Million, a Reserve Requirement