Table 29-5.
-Refer to Table 29-5. If the bank is holding $4,000 in excess reserves, then the reserve requirement with which it must comply is
A)17 percent.
B)12 percent.
C)13 percent.
D)14 percent.

Question

Table 29-5. 
-Refer to Table 29-5. If the bank is holding $4,000 in excess reserves, then the reserve requirement with which it must comply is
A)17 percent. 
B)12 percent. 
C)13 percent. 
D)14 percent.

Quizplus · Accepted Answer

The reserve requirement can be calculated using the formula: Reserve Requirement = (Required Reserves / Deposits) * 100. Given that the bank is holding $4,000 in excess reserves, we need to determine the required reserves and total deposits to find the reserve requirement. The correct reserve requirement that aligns with the given excess reserves is 13 percent.

Table 29-5. -Refer to Table 29-5. If the Bank Is Holding $4,000