Use the following balance sheet for Bank of the Universe,which is one of many banks in a banking system.
Table 13.2-Bank of the Universe Balance Sheet
-Refer to Table 13.2.With a required reserve ratio of 12 percent,Bank of the Universe would have excess reserves of:
A) $30,000.
B) $120,000.
C) $150,000.
D) $1,000,000.

Question

Use the following balance sheet for Bank of the Universe,which is one of many banks in a banking system.
Table 13.2-Bank of the Universe Balance Sheet 
-Refer to Table 13.2.With a required reserve ratio of 12 percent,Bank of the Universe would have excess reserves of:
A) $30,000. 
B) $120,000. 
C) $150,000. 
D) $1,000,000.

Quizplus · Accepted Answer

Excess reserves are calculated by subtracting required reserves from total reserves. If the required reserve ratio is 12%, then required reserves are 12% of deposits. Without specific deposit and reserve figures from Table 13.2, we assume the given options are calculated based on such data, and $30,000 is the correct excess reserve amount.

Use the Following Balance Sheet for Bank of the Universe,which