Answer the following in the basis of the following consolidated balance sheet of
ID: 1207819 • Letter: A
Question
Answer the following in the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 20 percent. All figures are in billions and each question should be answered independently of changes specified in all preceding ones.
Refer to the given data. The commercial banking system has excess reserves of:
A.) Zero
B.) $2 billion
C.) $5 billion
D.) $10 billion
Explanation / Answer
The commercial banking system has excess reserves of:
A.) Zero
Reserves +secutrities = 500
Loan = 500
Therefore, excess reserves are zero.