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If a bank has excess reserves of $7,000 and demand deposit liabilities of $100,000, and if the reserve requirement is 15%, then the bank has actual reserves of______________.

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Answer:

If a bank has excess reserves of $7,000 and demand deposit liabilities of $100,000, and if the reserve requirement is 15%, then the bank has actual reserves of $22,000.

Step-by-step explanation:

Total deposit = $100,000

Reserve requirement = 15% of the total deposit

Therefore, required reserves = 15% of $100,000

=15/100 * $15,000

= 0.15*$100,000

required reserves = $15,000

The excess reserves given in the question = $7,000

Total reserves = Required reserves + Excess reserves = $15,000 + $7,000 = $22,000

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