Table 16-4.
-Refer to Table 16-4. If the bank faces a reserve requirement of 10 percent, then the bank
A)is in a position to make a new loan of $15,000.
B)has fewer reserves than are required.
C)has excess reserves of $10,000.
D)None of the above is correct.

Question

Table 16-4. 
-Refer to Table 16-4. If the bank faces a reserve requirement of 10 percent, then the bank
A)is in a position to make a new loan of $15,000. 
B)has fewer reserves than are required. 
C)has excess reserves of $10,000. 
D)None of the above is correct.

Quizplus · Accepted Answer

The bank has excess reserves of $10,000 because it holds more reserves than the required 10% of its deposits.

Table 16-4. -Refer to Table 16-4. If the Bank Faces a Reserve