Question

Bank B has checkable deposits of $80 million and total reserves of $20 million. If the required reserve ratio is 10 percent, it follows that the bank has excess reserves of a. $8 million b. $12 million c. $60 million d. $20 million e. There is not enough information provided to answer the question.

          Bank B has checkable deposits of $80 million and total reserves of $20 million. If the required reserve ratio is 10 percent, it follows that the bank has excess reserves of
a. $8 million
b. $12 million
c. $60 million
d. $20 million
e. There is not enough information provided to answer the question.

Bank B has checkable deposits of 80 million and total reserves of20 million. If the required reserve ratio is 10 percent, it follows that the bank has excess reserves of
a. 8 million
b.12 million
c. 60 million
d.20 million
e. There is not enough information provided to answer the question.

Added by Kim G.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Andrew Davis

12/07/2022

Step 1

Step 1: Calculate the required reserves: $80 million * 10% = $8 million Show more…

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Bank B has checkable deposits of $80 million and total reserves of $20 million. If the required reserve ratio is 10 percent, it follows that the bank has excess reserves of a. $8 million b. $12 million c. $60 million d. $20 million e. There is not enough information provided to answer the question.