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JAMB Economics 2008 Question 30

Question 30

Financial Institutions

If the required reserves of a bank is 20% and ₦10 000 is paid into its demand deposit account, what is the excess reserves?

  1. A.₦2 000
  2. B.₦8 000
  3. C.₦12 000
  4. D.₦18 000
Show the answer and explanation

Answer: B (₦8 000)

Explanation

Required reserve = 20% of ₦10 000 = ₦2 000, so excess reserves = ₦10 000 − ₦2 000 = ₦8 000.