Exhibit 15-1

-Refer to Exhibit 15-1. Assume the required reserve ratio is 10%. If Stu Dent deposits $10,000 in cash into his checkable deposit account, how much will Eubank have in excess reserves?

Question

Exhibit 15-1
 
-Refer to Exhibit 15-1. Assume the required reserve ratio is 10%. If Stu Dent deposits $10,000 in cash into his checkable deposit account, how much will Eubank have in excess reserves?

Quizplus · Accepted Answer

The required reserve ratio is 10%, so Eubank must hold $1,000 in reserves ($10,000 x 0.10). Since Stu Dent deposited $10,000, Eubank now has $11,000 in checkable deposits ($10,000 + $1,000). Eubank can lend out the excess reserves, which in this case is $9,000 ($11,000 - $1,000), so the answer is (C) $9,000.

Exhibit 15-1 -Refer to Exhibit 15-1. Assume the Required Reserve Ratio Is