Assuming That the Reserve Ratio Is 10%, What Amount of Excess

question 33

Multiple Choice

Assuming that the reserve ratio is 10%, what amount of excess reserves are held by with the bank balance sheet listed below?
$\begin{array}{c}\begin{array}{lr}\text { Assets }\\\text { Reserves } &\$ 280,000 \\\text { Loans Outstanding } & \$ 2,920,000 \\\hline \text { Total } & \$ 3,200,000\\\\\\\end{array}\begin{array}{lll}\text { Liabilities \& Net Worth }\\\text {Checking deposits}& \$ 2,800,000\\\\\text { Net Worth }\\\text {Stockholders' Equity}& \$ 400,000\\\hline \text { Total}& \$3,200,000 \\\end{array}\end{array}$

• A) zero
• B) $240,000
• C) $280,000
• D) $320,000

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Definitions:

Phase Currents

The electric current flowing through one phase of a multi-phase system.

Neutral Conductor

The conductor in an electrical system that is grounded and carries current only under fault conditions, providing a path for current to return to its source in a balanced system.

True-RMS Indicating Ammeter

An electrical measuring instrument that accurately measures the root mean square (RMS) of a varying current, reflecting true power even in non-sinusoidal situations.

Average-Indicating Ammeter

A device used to measure the average current flowing through a circuit.