If excess reserves are $30,000,demand deposits are $500,000,and the minimum reserve requirement is 10 percent,then total reserves are:

Question

Quizplus · Accepted Answer

Total reserves include both the required reserves and excess reserves. Required reserves are 10% of demand deposits, which is 10% of $500,000 = $50,000. Excess reserves are $30,000. Therefore, total reserves = required reserves + excess reserves = $50,000 + $30,000 = $80,000.

If Excess Reserves Are $30,000,demand Deposits Are $500,000,and the Minimum