Respuesta :
Total Reserves:
Total reserves refer to the whole sum of all the deposits that a budgetary institution has. This incorporates the desired saves kept at the Encouraged furthermore the excess reserves that banks are cleared out with after dispatching their required saves with the Encouraged.
Explanation:
The correct answer is: A. $77 million; $8 million
If the required reserve ratio is 10%, and the bank has a total of $770 million in checkable deposits, then it will be required to hold an amount equal to
$770×10%=$77 million as the required reserves.
We know that the total reserves is equal to the excess reserves plus the required reserves.
Reserve=Excess Reserve+Required Reserve
The bank has a total reserve of
$85 million.
Therefore:
$85=$77+Excess Reserve
Excess Reserve =$85−$77
Excess Reserve =$8million
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