Table 29-5 The following information pertains to the Bank of Kingston.

-Refer to Table 29-5. If the Bank of Canada requires a reserve ratio of 4 percent, how much in excess reserves does the Bank of Kingston now hold?
A)$1200
B)$2400
C)$2880
D)$3000

Question

Table 29-5 The following information pertains to the Bank of Kingston.
 
-Refer to Table 29-5. If the Bank of Canada requires a reserve ratio of 4 percent, how much in excess reserves does the Bank of Kingston now hold?
A)$1200 
B)$2400 
C)$2880 
D)$3000

Quizplus · Accepted Answer

The Bank of Kingston holds $3000 in reserves. With a reserve ratio of 4%, required reserves are 4% of $30,000 in deposits, which is $1200. Excess reserves are total reserves minus required reserves: $3000 - $1200 = $1800. However, the closest option is $2400, indicating a possible error in the question or options.

Table 29-5 the Following Information Pertains to the Bank of Kingston