A bank's checkable deposits are $960, its loans are $857 and the bank has reserves of $103. If the bank faces a required reserve ratio of 9%, then what are the bank's current excess reserves?
Answer
required reserves =checkable deposits * required reserves
ratio
=960*0.09
=86.4
Excess reserves =reserves - required reserves
=103-86.4
=16.6
Excess reserves =$16.6
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