Suppose a bank's excess reserves are equal to $100 million.The bank is required to hold $50 million as reserves.The bank currently holds _____as reserves.
A)$50 million
B)$100 million
C)$150 million
D)$200 million

Question

Quizplus · Accepted Answer

The bank currently holds $150 million as reserves because the $100 million in excess reserves are in addition to the $50 million it is required to hold.

Suppose a Bank's Excess Reserves Are Equal to $100 Million