Ask Question
8 September, 16:24

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) ?

+2
Answers (1)
  1. 8 September, 18:03
    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 you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers