If a Bank Has Deposits of $250 Million, Reserves That

question 43

Multiple Choice

If a bank has deposits of $250 million, reserves that total $30 million and has a required reserve rate of 10 percent:

• A) the bank is short of required reserves.
• B) the bank has excess reserves of $27.5 million.
• C) the bank has excess reserves of $5 million.
• D) the bank has excess reserves of $3 million.