If Bank A holds $200 in reserves, deposits are $1000, and the desired reserve ratio is 15 percent, how much are excess reserves?

Name: If Bank A holds $200 in reserves, deposits are $1000, and the desired reserve ratio is 15 percent, how much are excess reserves?
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Question

Quizplus · Accepted Answer

The desired reserve ratio is 15 percent, thus the required reserves are 0.15 * $1000 = $150. Since the bank has $200 in reserves, it has $200 - $150 = $50 in excess reserves. Therefore, the correct answer is C.

If Bank a Holds $200 in Reserves, Deposits Are $1000