Multiple Choice
Scenario 11-2
A bank's assets consist of $1 000 000 in total reserves, $2 100 000 in loans, and a building worth $1 200 000. Its liabilities and capital consist of $3 000 000 in demand deposits and $1 300 000 in capital.
-Refer to Scenario 11-2.If the desired reserve ratio is 40 percent,what is the level of the bank's excess reserves?
A) Excess reserves are $500 000.
B) Excess reserves are zero.
C) The bank has insufficient reserves to meet its reserve requirements.
D) Excess reserves are $200 000.
Correct Answer:
Verified
Correct Answer:
Verified
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