The Banks on Sunny Island Have Deposits of $4 Million

Multiple Choice

The banks on Sunny Island have deposits of $4 million, reserves of $600,000, and loans of $2.4 million.The desired reserve ratio is 10 percent.The banks have _______ of desired reserves and _______ of excess reserves.

A) $200,000; $600,000
B) $200,000; $400,000
C) $600,000; $200,000
D) $400,000; $600,000
E) $400,000; $200,000