Problem:
A bank with deposits of $500 million has $75 million in cash on hand, $50 million in deposits with the Fed, and $80 million in government securities.
Required:
Question: If the reserve requirement is 15 percent, the bank has excess reserves of?
A) $50 million.
B) $ 130 million
C) 0
D) 5 million.
Note: Provide thorough explanation of every question given in the problem.