A bank reports reserves of $100,000, government securities of $250,000, loans of $750,000, checkable deposits of $900,000, and owners' equity of $200,000
The desired reserve ratio is 10 percent and the bank wants to hold as reserves only the amount it is required to hold. What is the amount of excess reserves for this bank? Show your work.
Excess reserves equal the actual reserves minus the desired reserves. The actual reserves are $100,000. The bank desires to keep 10 percent of its checkable deposits as reserves, so the desired reserves are ($900,
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