Question

suppose the national bank of commerce has excess reserves of 8000 and outstanding checkable deposits and 150000 if the reserve ratio is 20 percent, what is the size of the banks actual reserves

Answer 1

the size of the banks actual reserves is $38,000

Step-by-step explanation:

The computation the size of the bank actual reserve is shown below:

But before that the required reserve is

= Reserve ratio × checkable deposit

= 20% × 150,000

= $30,000

Now the actual reserve is

= Required reserve + excess reserve

= $30,000 + $8,000

= $38,000

Hence, the size of the banks actual reserves is $38,000