Assuming that the reserve ratio is 10 percent, what amount of excess reserves are held by with the bank balance sheet listed below?
?
Assets
?
?
Liabilities & Net Worth
?
Reserves
$280,000
?
Checking Deposits
$2,800,000
Loans Outstanding
$2,920,000
?
?
?
Total
$3,200,000
?
Net Worth
?
?
?
?
Stockholders’ Equity
$400,000
?
?
?
Total
$3,200,000
A. zero
B. $240,000
C. $280,000
D. $320,000
Answer: A
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