If a bank gets a $100,000 new deposit, chooses to lend out $75,000, and increases its excess reserves by $5,000 at the same time, then the reserve requirement is:

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The reserve requirement can be calculated by understanding that the bank must hold a certain percentage of the deposit as reserves. Given that the bank lends out $75,000 and increases its excess reserves by $5,000, it implies that the total reserves set aside from the new deposit are $25,000 ($20,000 as required reserves + $5,000 as excess reserves). Therefore, the reserve requirement is $20,000 / $100,000 = 20%.

If a Bank Gets a $100,000 New Deposit, Chooses to Lend