If the reserve requirement is 15 percent and a customer makes a new cash deposit of $50,000, how much new excess reserves are created?

Name: If the reserve requirement is 15 percent and a customer makes a new cash deposit of $50,000, how much new excess reserves are created?
Brand: Quizplus
Rating: 4.8 (52 reviews)

Question

Quizplus · Accepted Answer

The reserve requirement is 15%, so the bank must keep $7,500 (15% of $50,000) as required reserves. The remaining $42,500 is excess reserves that the bank can use for lending or other purposes.

If the Reserve Requirement Is 15 Percent and a Customer