Question

Suppose a commercial bank has checkable deposits of $60,000 and the legal reserve ratio is 25 percent. If the bank's required and excess reserves are equal, then its actual reserves

Answer 1

Answer: $30000

Explanation:

Based on the information given in the question, the required reserve will be:

= $60000 × 25%

= $15000

Since the bank's required and excess reserves are equal, then the excess reserve will be $15000.

Therefore, the actual reserves will be:

= Required reserve + Actual reserve

= $15000 + $15000

= $30000