Final answer:
The question pertains to calculating the reserves, required reserves, and excess reserves with a 10% Federal Reserve requirement for Second Republic Bank. Required reserves are 10% of checkable deposits ($5,000), and without more data, the amount of actual reserves and excess reserves cannot be precisely calculated as it depends on the bank's actual cash on hand.
Step-by-step explanation:
The subject of this question is related to the concept of reserve requirements in the field of Business, more specifically in banking operations and monetary policy. A student is asking about calculating the reserves, required reserves, and excess reserves for the Second Republic Bank considering the Federal Reserve's 10% reserve requirement.
Given that the Second Republic Bank currently has $50,000 in checkable deposits, the required reserves would be 10% of that amount, which amounts to $5,000 ($50,000 x 0.10). Reserves refer to the cash held by the bank that is not lent out or used for investments. If the bank is supposed to have these reserves but also has $32,500 in outstanding loans, and assuming no other liabilities or cash on hand, it could mean that its reserves are actually the difference between its checkable deposits and loans. However, there is not enough information to determine the exact amount of reserves the bank holds without additional data on the bank's actual cash on hand or its deposits at the Federal Reserve Bank.
The excess reserves would be the actual reserves held minus the required reserves. If the bank holds exactly the required reserves with no additional cash on hand, then excess reserves would be $0. If the bank holds more than the required reserves, the excess would be the additional amount above the required $5,000.