Ask Question
12 January, 17:18

Suppose that Best National Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Fill in (dollars):

Best National

Reserves (Dollars) (Dollars) ?

Required Reserves (Dollars) ?

Excess Reserves (Dollars) ?

+3
Answers (1)
  1. 12 January, 17:32
    0
    Reserve = $70,000

    Required reserves = $20,000

    Excess reserves = $50,000

    Explanation:

    Given that

    Demand deposits = $200,000

    Outstanding loans = $130,000

    Reserve requirement = 10%

    Reserve = Demand deposits - Outstanding loans

    = $200,000 - $130,000

    =$70,000

    Required reserves = Reserve requirement * Demand deposits

    = 10% * $200,000

    = $20,000

    Excess reserves = Reserve - Required reserves

    = $70,000 - $20,000

    =$50,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose that Best National Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers