The bank has an excess of $7,250,000. The total deposits maintained by the bank are $125 million. The reserves maintained by the bank are $26 million. The required reserve ratio is 15%.
Total deposits are 125,000,000.
The Required reserve ratio is 15%.
So in actuality, the bank had to maintain a reserve of $18,750,000.
It is maintained a total reserve of $ 26,000,000.
Excess reserve of $7,250,000.
The banks are required to maintain a particular percentage as reserve of the amount deposited with them. Deposit is that amount that the customers maintain with them. The banks make a profit by lending this deposit to other lenders. The bank has to keep an amount as reserve to see that they are able to pay back the customer their deposit amount if required by the customer.
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<u>Examples from the speech of Ronald Wilson Reagan:</u>
Ronald Wilson Reagan was an U.s politician and was a major power voice in modern liberalism as President of the USA.
Example for strengthening or weakening the attitudes, beliefs or values of his audience:
In the 1950s, Khrushchev anticipated, 'We will bury you'. But now, in the USA, we are seeing a civilized world which has accomplished a standard of life and very well-being historically unprecedented. In the socialist world, we are facing stagnation, technical retrograde circumstances, dropping standards, even a lack of basic nutrition.
Example for motivate his audience to action, President Regan's aim when he said:
" Secretary-General Gorbachev, if you really are seeking peace if you are pursuing stability for the Soviets and Europe if you are seeking democratization, Move over here to the gate.
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