Suppose a bank has $8,000 in chequable deposits and the desired reserve ratio is 0.2.And suppose actual reserves equal $3,000.What do excess reserves equal?

Question

Quizplus · Accepted Answer

Excess reserves equal desired reserves minus actual reserves. In this case, desired reserves are 0.2 * $8,000 = $1,600. Actual reserves are $3,000. Therefore, excess reserves are $1,600 - $3,000 = $1,400.

Suppose a Bank Has $8,000 in Chequable Deposits and the Desired