Question

A bank has the following assets: 60,000 in reserves, 30,000 in loans and 90,000 in checkable deposits. The reserve requirement is 25%; whats the banks amount of actual reserves?

Answer 1

Actual reserves are reserves above reserve requirement. Bank has 30000 in loans and 90000 in deposits (total 120000). Reserve rate is equal to 25%, so
reserve requirement for this bank is equal to 0.25*120000=30000. And bank has
60000 in reserves, so actual reserves are equal to 60000-30000=30000.




Answer: actual reserves are 30000.