If the required reserve ratio is one-third,currency in circulation is $300 billion,and checkable deposits are $900 billion,then the currency ratio is

Question

Quizplus · Accepted Answer

The currency ratio is the ratio of currency in circulation to checkable deposits. It can be calculated as follows:
Currency ratio = Currency in circulation / Checkable deposits
Currency in circulation = $300 billion
Checkable deposits = $900 billion
Currency ratio = $300 billion / $900 billion
Currency ratio = 0.33 or 1/3 (rounded to two decimal places)
Therefore, the best choice is B, since the required reserve ratio is also given as one-third.

If the Required Reserve Ratio Is One-Third,currency in Circulation Is