A small commercial bank has $10,000 in actual reserves,$60,000 in deposits,and has a 10 percent desired reserve ratio.Its excess reserves are

Question

Quizplus · Accepted Answer

The desired reserve ratio is 10%, so the required reserves would be 10% of $60,000 = $6,000. The actual reserves are $10,000, which is greater than the required reserves of $6,000. Therefore, the excess reserves would be the difference between the actual reserves and the required reserves which is $10,000 - $6,000= $4,000. So, option A is the correct answer.

A Small Commercial Bank Has $10,000 in Actual Reserves,$60,000 in Deposits,and