Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 deposit, then its excess reserve balance will be:

Name: Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 deposit, then its excess reserve balance will be:
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Question

Quizplus · Accepted Answer

The required reserve is 10% of $1,000, which is $100. Therefore, the excess reserve is the remaining amount, $1,000 - $100 = $900.

Imagine That Odyssey National Is a Brand New Bank, and That