Respuesta :
Answer:
$10,000
Explanation:
First the complete Question:
What level of excess reserves does the bank now have? $____.
The Third National Bank Checkable Deposits is $100,000 and the required reserve in the Bank is 10 percent of this Checkable Deposit per time.
It means Required Reserve will only increase when Checkable Deposit increases. If the reserve should increase without an increase in Checkable Deposit then the increase in reserve becomes the excess reserve.
1. Since the reserve ratio is 10%, it means the initial reserve of $10,000 is the required reserve for the $100,000 Checkable Deposits without any excess
2. The bank sells $10,000 in securities. The implication of the sales is that reserve has now increased; $10,000 (previous balance) + $10,000 (sales of securities)= $20,000 (currently in the reserve).
3. However, this sales does not make an immediate change in the balance of the Checkable Deposits. This means the Checkable deposit is still $100,000 and the required reserve ratio is still 10 percent which is $10,000.
4. Therefore, excess reserve = Actual Reserve - Required Reserve
Actual Reserve= 20,000
Required Reserve (10% of 100,000 Checkable deposits) =10,000
=$20,000-$10,000=$10,000
