The following balance sheet is for the First National Bank.Assume the desired reserve ratio is 15 percent.

-Refer to the above data.If a cheque for $20,000 is drawn and cleared against this bank,it will have excess reserves of:

Question

The following balance sheet is for the First National Bank.Assume the desired reserve ratio is 15 percent.
 
-Refer to the above data.If a cheque for $20,000 is drawn and cleared against this bank,it will have excess reserves of:

Quizplus · Accepted Answer

The bank initially has $35,000 in excess reserves. After a $20,000 cheque is cleared, the excess reserves will be reduced by $20,000, leaving $15,000 in excess reserves.

The Following Balance Sheet Is for the First National Bank