If Suntrust Banks have demand deposits of $10 billion,actual reserves of $2 billion,and the reserve requirement is 18%,the bank's excess reserves are

Question

Quizplus · Accepted Answer

The reserve requirement is 18%, so the required reserves will be 18% of $10 billion, which is $1.8 billion. Since the bank has actual reserves of $2 billion, excess reserves will be actual reserves minus required reserves, which is $2 billion - $1.8 billion = $200 million. Therefore, the correct answer is B) $200 million.

If Suntrust Banks Have Demand Deposits of $10 Billion,actual Reserves