Answer the question on the basis of the following table for a commercial bank or thrift: $\begin{array}{c}
\begin{array}{c}
(1)\
\text {Legal Reserve}\
\underline{\text {Ratio (\%)}}\
10 \
20 \
25 \
30
\end{array}
\begin{array}{c}
(2)\
\text {Checkable}\
\underline{\text {Deposits}}\
\$ 40,000 \
40,000\
40,000\
40,000
\end{array}
\begin{array}{c}
(3)\
\text {Actual}\
\underline{\text {Reserves}}\
\$ 10,000 \
10,000\
10,000\
10,000
\end{array}
\end{array}$

Refer to the table.When the legal reserve ratio is 25 percent,the excess reserves of this single bank are:
A) $0.
B) $1,000.
C) $5,000.
D) $30,000.

Question

Answer the question on the basis of the following table for a commercial bank or thrift: $\begin{array}{c}
\begin{array}{c}
(1)\
\text {Legal Reserve}\
\underline{\text {Ratio (\%)}}\
10 \
20 \
25 \
30
\end{array}
\begin{array}{c}
(2)\
\text {Checkable}\
\underline{\text {Deposits}}\
 \$ 40,000 \
40,000\
40,000\
40,000
\end{array}
\begin{array}{c}
(3)\
\text {Actual}\
\underline{\text {Reserves}}\
\$ 10,000 \
10,000\
10,000\
10,000
\end{array}
\end{array}$

Refer to the table.When the legal reserve ratio is 25 percent,the excess reserves of this single bank are:
A) $0.
B) $1,000.
C) $5,000.
D) $30,000.

Quizplus · Accepted Answer

The required reserves are 25% of $40,000, which is $10,000. Since the actual reserves are also $10,000, the excess reserves are $0.

Answer the Question on the Basis of the Following Table