University National Bank Balance Sheet
Assets Liabilities

-The above table has the balance of the University National Bank.All figures are in millions of dollars.The desired reserve ratio is 20 percent.What is the value of excess reserves held by the University National Bank?

Question

University National Bank Balance Sheet
Assets Liabilities
 
-The above table has the balance of the University National Bank.All figures are in millions of dollars.The desired reserve ratio is 20 percent.What is the value of excess reserves held by the University National Bank?

Quizplus · Accepted Answer

To find the excess reserves held by the bank, we need to calculate the required reserves first. Required reserves = deposits x reserve ratio. Deposits are given as $1,200 million and the reserve ratio is 20%, so the required reserves are $240 million. Excess reserves are the difference between actual reserves and required reserves. Actual reserves are given as $472 million, so excess reserves = actual reserves - required reserves = $232 million. Therefore, the answer is B) $232 million.