Answer:
a. The bank has excess reserves of $100
Explanation:
Base on the scenario been described in the question, since the former reserve ratio is 0.1 and after Linda made a deposit of $4,000 with the bank not having any excess reserve
Linda deposits will give the bank a reserve of $4,000×0.1= $400
The bank reserve increase to $500
That mean it has = $500 - $400
= $100 reserve before Linda deposits
