Suppose Central City Bank has reserves equal to $850 million and deposits equal to $700 million. If the required reserve ratio is equal to 0.11, and the desired reserve ratio equals 0.15, what is the value of Central City Bank's excess reserves? Assume the currency drain ratio is zero. $ million

 

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Suppose Central City Bank has reserves equal to $850 million and deposits equal to $700 million. If the required reserve ratio is equal to 0.11, and the desired reserve ratio equals 0.15, what is the value of Central City Bank's excess reserves? Assume the currency drain ratio is zero. $ million

Expert Answer

Excess reserves are the funds that a bank holds in reserve above the required minimum View the full answer