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 15 percent,Bank of the Universe would have excess reserves of:
A) $150,000.
B) $850,000.
C) $1,000,000.
D) Zero.

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 15 percent,Bank of the Universe would have excess reserves of:
A) $150,000. 
B) $850,000. 
C) $1,000,000. 
D) Zero.

Quizplus · Accepted Answer

Excess reserves are calculated as total reserves minus required reserves. If the bank's reserves are exactly equal to the required reserves, then excess reserves would be zero.

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