Table 29-4.
The First Bank of Wahooton

-Refer to Table 29-4.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 29-4.
The First Bank of Wahooton
 
-Refer to Table 29-4.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 has $25,000 in reserves and only needs $15,000 to meet the 10% reserve requirement on $150,000 of deposits.

Table 29-4. The First Bank of Wahooton