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6 November, 18:29

a. ABC Bank has $300,000 of checkable deposits. If the Federal Reserve has a reserve requirement of 12 percent, what is the required reserves? $ b. XYZ Bank has required reserves of $26,050 and excess reserves of $494,950, what is the amount of actual reserves? $

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  1. 6 November, 18:46
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    Required reserves = $36000

    Actual reserves = $521000

    Explanation:

    given data

    check able deposits = $300,000

    reserve requirement = 12 percent

    required reserves = $26,050

    excess reserves = $494,950

    to find out

    what is the required reserves and amount of actual reserves

    solution

    we get here Required reserves that is express as

    Required reserves = reserve ratio * check able deposits ... 1

    put here value we get

    Required reserves = 12% * $300,000

    Required reserves = $36000

    and

    Actual reserves will be

    Actual reserves = required reserves + excess reserves ... 2

    Actual reserves = $26,050 + $494,950

    Actual reserves = $521000
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