If the required reserves of a bank is 20% and N10 000 is paid into
ECONOMICS
JAMB 2008
If the required reserves of a bank is 20% and N10 000 is paid into its demand deposit account, what is the excess reserves?
- A. N2000
- B. N18 000
- C. N12 000
- D. N8 000
Correct Answer: D. N8 000
Explanation
Reserve = 20/100 X 10,000 = 2000 Excess reserve = 10,000 - 2000 = 8000
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