Question

Excess reserves A. are loans made at above market interest rates. B. are the deposits that banks do not use to make loans. C. are reserves banks keep to meet the reserve requirement. D. are reserves banks keep above the legal requirement. Suppose the required reserve ratio is ​% and a bank has the following balance​ sheet: Assets Liabilities Reserves ​$ Deposits ​$ Loans ​$ This bank keeps required reserves of ​$ nothing and excess reserves of ​$ nothing. ​(Enter your responses as​ integers.)

Answer 1

Answer and Explanation:

The excess reserves are the reserves banks that maintain more the legal requirement. It shows the difference between the required reserve and the actual reserve

Hence, the last option is correct

Now the required reserve is

= ($11,000 × 11%)

= $1,210

And, the excess reserve is

= $2,200 - $1,210

= $990

Hence, the same would be relevant