Suppose that a bank's actual reserves are $5 million, its checkable deposits are $5 million, and its excess reserves are $3 mill

Question

Kitty [74]

2 years ago

15

Suppose that a bank's actual reserves are $5 million, its checkable deposits are $5 million, and its excess reserves are $3 mill

ion. the reserve requirement must be:_______

Business

1 answer:

lesya692 [45] · Answer 1 · 2023-04-16T18:59:23+03:00

The reserve requirement is 40%.

<h3>What is the reserve requirement?</h3>

Reserve requirement is the percentage of deposits that is required of commercial banks to keep as reserves with the Central Bank. The reserve requirement is a told that is used by the Central Bank of a country to control the level of money supply in the economy.

The first step is to determine the reserves of the bank.

Reserves = checkable deposits - excess reserves

$5 million - $3million = $2 million

Reserve requirement : (reserves / checkable deposits) x 100

($2 million / $5 million ) x 100 = 40%

To learn more about reserve requirement, please check: brainly.com/question/6831267

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