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Laury Enid Rivera Olmo
on Nov 11, 2024

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Suppose a bank has $8,000 in checkable deposits and the required reserve ratio is 0.2.If actual reserves equal $3,000,then excess reserves equal:

A) $1,600.
B) $1,400.
C) $2,400.
D) $5,000.
E) zero.

Required Reserve Ratio

The ratio of reserves to deposits that banks are obligated by regulation to hold.

Excess Reserves

Bank reserves exceeding required reserves

Checkable Deposits

Funds kept in bank accounts that can readily be withdrawn by writing a check or using a debit card, making them a highly liquid form of money.

  • Understand the basics of bank operations, including asset, liability, and net worth relationships.
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kamila greenNov 18, 2024
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