Suppose a bank has $1 million in deposits, a reserve ratio of 25 percent, and reserves of $250,000. This bank has excess reserves of

Name: Suppose a bank has $1 million in deposits, a reserve ratio of 25 percent, and reserves of $250,000. This bank has excess reserves of
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The bank's required reserves are 25% of $1 million, which equals $250,000. Since the bank has reserves of $250,000, it exactly meets its required reserve amount, leaving it with $0 in excess reserves.

Suppose a Bank Has $1 Million in Deposits, a Reserve