Bank A has checkable deposits of $140 million, vault cash equaling $1 million and deposits at the Fed equaling $14 million. If the required reserve rate is ten percent what is the amount of excess reserves Bank A is holding:
A. They do not have any excess reserves.
B. $15 million.
C. $2 million.
D. None of the above.
Answer:D
Bank A has checkable deposits of $140 million, vault cash equaling $1 million and deposits at the Fed equaling $14 million. If the required reserve rate is ten percent what is the amount of excess reserves Bank A is holding:
A. They do not have any excess reserves. B. $15 million. C. $2 million. D. None of the above.