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15 July, 06:00

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.

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Answers (1)
  1. 15 July, 07:05
    0
    The answer is option "c. 35/400".

    This is how we calculate this;

    reserve requirement = (bank deposits - loans - excess reserves) / bank deposits

    = (400 - 355 - 10) / 400

    = 35/400
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