If the minimum reserve ratio is 20 percent,then $1 of reserves can support a maximum of $10 more in transactions deposits.

Name: If the minimum reserve ratio is 20 percent,then $1 of reserves can support a maximum of $10 more in transactions deposits.
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Quizplus · Accepted Answer

With a 20 percent reserve ratio, $1 of reserves can support a maximum of $5 in transactions deposits, because the formula to calculate the maximum increase in deposits is 1/Reserve Ratio, which in this case is 1/0.20 = 5.

If the Minimum Reserve Ratio Is 20 Percent,then $1 of Reserves