Table 13-2

-In Table 13-2,if excess reserves for XYZ Bank are $30,000,the desired reserve ratio

Question

Table 13-2
 
-In Table 13-2,if excess reserves for XYZ Bank are $30,000,the desired reserve ratio

Quizplus · Accepted Answer

The formula for the desired reserve ratio is (required reserves + excess reserves) / total deposits. We know that excess reserves are $30,000 and we are given the total deposits for XYZ Bank in the table. Using the formula, we can solve for the required reserves as follows:
(required reserves + $30,000) / $200,000 = 0.15
Required reserves = $27,000
Therefore, the total reserves that XYZ Bank must hold, including required and excess reserves, is $57,000. The desired reserve ratio is the ratio of these total reserves to total deposits, which is 0.285 or 28.5%. The closest answer choice is B (17% is too low and 30% is too high).

Table 13-2 -In Table 13-2,if Excess Reserves for XYZ Bank Are $30,000,the