The desired reserve ratio is 10 percent. Fly By Night Bank has ...

[ssal]

The desired reserve ratio is 10 percent. Fly By Night Bank has deposits of 250,000 and reserves of 25,000. What is the amount of its excess reserves?
 
  What will be an ideal response?

Question 2

In the above figure, a single-price monopolist charges a price of ________ and the equilibrium competitive price is ________.
 
  A) 10; 20
  B) 20; 30
  C) 30; 20
  D) 30; 10

[Perkypinki]

Answer to Question 1

The bank has no excess reserves. It wants to have (250,000 )  (0.10 ) = 25,000 as reserves. Its actual reserves equal 25,000. Therefore its excess reserves equal 25,000 - 25,000, or 0.

Answer to Question 2

C

[ssal]

Excellent

[gcook]

Thanks for the timely response, appreciate it