A bank has $770 million in checkable deposits. The bank has $85 million in reserves. The bank's required reserves are ________ and its excess reserves are ________.

Question

Quizplus · Accepted Answer

The required reserves are calculated based on a percentage of the checkable deposits. Assuming a common reserve requirement of 10%, the required reserves would be 10% of $770 million, which is $77 million. The excess reserves are the total reserves minus the required reserves, which is $85 million - $77 million = $8 million.

A Bank Has $770 Million in Checkable Deposits