1st attempt OSee Hint Let\'s suppose that a bank has $800 million in total depos

Question

1st attempt OSee Hint Let's suppose that a bank has $800 million in total deposits. This bank is subject to a 20% required reserve ratio and has $150 million in reserves. Which of the following statements is correct? Choose one: A. The bank has no excess reserves. B. The bank has insufficient reserves. It needs an additional $640 mil on to meet the reserve requirement. C. The bank has $130 million in excess reserves D. The bank has $30 million in excess reserves. E. The bank has insufficient reserves. It needs an additional $10 million to meet the reserve requirement

Explanation / Answer

Solution: The bank has insufficient reserves. It needs an additional $10 million to meet the reserve requirements

Explanation: Required reserve= 800*20% = 160 million

Insufficient reserves = 160 million - 10 million = 10 million

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.