If a bank's total reserves are $13.1bln., reserve requirement ratio is 5.9%, and the bank's total...
If a bank's total reserves are $13.1bln., reserve requirement
ratio is 5.9%, and the bank's total deposits are $112.5bln., what
are the bank's excess reserves, in $bln (to the nearest
$0.01bln)?
Note: Excess reserves may be negative.
Homework Answers
Bank Deposits = $112.5 b
Reserve Requirement = 5.9% of Bank Deposits = 0.059*112.5 = $6.64 b
Total Reserves = $13.1 b
Hence, Excess Reserves = Total Reserve - Reserve Requirement = 13.1 - 6.64 = $6.46 b
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