02. If you deposit a $50 bill in a commercial bank that has a 10
percent legal reserve requirement the bank will:
A. have $45 of additional excess reserves.
B. be capable of lending an additional $500.
C. be capable of lending an additional $50. D. have $50 of required reserves.
ANSWER:
The correct answer is option a that is have $45 of additional excess reserves.
reserves required = 10% * deposit = 10% * $50 = $5
Excess reserves = deposit - reserves required = $50 - $5 = $45
02. If you deposit a $50 bill in a commercial bank that has a 10 percent...