Which of the following is the correct formula to calculate Excess Reserves?

CA Foundation · Business Economics · PYQS · September 2024
Which of the following is the correct formula to calculate Excess Reserves?
(A) A. Excess Reserves = Total reserves + Required reserves
(B) B. Excess Reserves = Total reserves - Required reserves
(C) C. Excess Reserves = Total reserves / Required reserves
(D) D. Excess Reserves = Total reserves x Required reserves

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Excess Reserves = Total reserves - Required reserves

Topics: Money Market

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