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Suppose the ABC bank has excess reserves of $3,000 and checkable deposits of $50,000. If the reserve requirement is 20 percent, what is the size of the bank's actual reserves?
a. $53,000
b. $13,000
c. $10,000
d. $7,000

Respuesta :

abiolataiwo2015

Answer:

b. $13,000

Explanation:

Calculation to determine the size of the bank's actual reserves

Using this formula

Actual reserves size=Excess reserves+(Checkable deposits*Reserve requirement)

Let plug in the formula

Actual reserves size=$3,000+(.20*$50,000)

Actual reserves size=$3,000+$10,000

Actual reserves size=$13,000

Therefore the size of the bank's actual reserves is $13,000