The manager of the bank where you work tells you that your bank has $10 million in excess reserves. she also tells you that the

Question

3 years ago

9

The manager of the bank where you work tells you that your bank has $10 million in excess reserves. she also tells you that the

bank has $400 million in deposits and $355 million dollars in loans. given this information you find that the reserve requirement must be
a. 35/355.
b. 45/355.
c. 35/400.
d. 45/400.

Business

1 answer:

olganol [36] · Answer 1 · 2022-04-16T11:32:18+03:00

olganol [36]3 years ago

4 0

The answer is option "c. 35/400".

This is how we calculate this;

<span>reserve requirement = (bank deposits - loans - excess reserves) / bank deposits
</span>=(400 - 355 - 10) / 400
= 35/400