Suppose a bank has $160,000 in deposits and a required reserve ratio of 10 percent.Then required reserves are

Question

Quizplus · Accepted Answer

Required reserves are calculated as the required reserve ratio multiplied by the total deposits. Therefore, in this case, required reserves are 0.10 x $160,000 = $16,000 (Option A). Option B is the total amount of deposits, not the required reserves. Option C is the result of multiplying the total deposits by ten to account for the percentage, which is incorrect. Option D is an incorrect calculation, resulting from multiplying the required reserve ratio by 100 to convert it to a percentage.

Suppose a Bank Has $160,000 in Deposits and a Required