Answer the following in the basis of the following consolidated balance sheet of

Question

Answer the following in the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 20 percent. All figures are in billions and each question should be answered independently of changes specified in all preceding ones.

Refer to the given data. The commercial banking system has excess reserves of:
A.) Zero
B.) $2 billion
C.) $5 billion
D.) $10 billion

Explanation / Answer

The commercial banking system has excess reserves of:
A.) Zero

Reserves +secutrities = 500

Loan = 500

Therefore, excess reserves are zero.

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