Table 14.3 Monetary Aggregates of the U.S.Financial System
$\begin{array}{|l|r|}
\hline{\text { Item }} & \text { Amount } \
\hline \text { Cash held by public } & \$ 40 \text { billion } \
\hline\text { Transactions deposits } & \$ 80 \text { billion } \
\hline\text { Required reserves } & \$ 20 \text { billion } \
\hline\text { Excess reserves } & \$ 0 \text { billion } \
\hline\text { U.S. bonds held by public } & \$ 125 \text { billion }\
\hline
\end{array}$
Assume an original balance sheet: On the basis of the information in Table 14.3,the required reserve ratio is

Question

Table 14.3 Monetary Aggregates of the U.S.Financial System
$\begin{array}{|l|r|}
\hline{\text { Item }} & \text { Amount } \
\hline \text { Cash held by public } & \$ 40 \text { billion } \
\hline\text { Transactions deposits } & \$ 80 \text { billion } \
\hline\text { Required reserves } & \$ 20 \text { billion } \
\hline\text { Excess reserves } & \$ 0 \text { billion } \
\hline\text { U.S. bonds held by public } & \$ 125 \text { billion }\
\hline 
\end{array}$
 Assume an original balance sheet: On the basis of the information in Table 14.3,the required reserve ratio is

Quizplus · Accepted Answer

The required reserve ratio is calculated by dividing the required reserves by the transactions deposits. From the table, required reserves are $20 billion and transactions deposits are $80 billion. Thus, the required reserve ratio is $20 billion / $80 billion = 0.25 or 25%.

Table 143 Monetary Aggregates of the U Assume an Original Balance Sheet: on the Basis of the Item