Table 9-4
Acme Bank: Partial Balance Sheet
(All figures in $ million)

-Refer to Table 9-4. If Acme Bank has no excess reserves, the required reserve ratio is
A) 26.67%
B) 16%
C) 10%
D) There is insufficient information to answer question.

Question

Table 9-4
Acme Bank: Partial Balance Sheet
(All figures in $ million)
 
-Refer to Table 9-4. If Acme Bank has no excess reserves, the required reserve ratio is
A) 26.67% 
B) 16% 
C) 10% 
D) There is insufficient information to answer question.

Quizplus · Accepted Answer

The required reserve ratio can be calculated using the formula:
Required Reserve Ratio = Required Reserves / Total Deposits
Given that Acme Bank has no excess reserves, its required reserves will be equal to its deposits, which is $750 million. Therefore, the required reserve ratio will be:
Required Reserve Ratio = $750 million / $7,500 million = 0.1 or 10% (Option C).

Table 9-4 Acme Bank: Partial Balance Sheet