Bigbux Bank currently has deposits of $300 million. If the Fed establishes a reserve requirement of 12 percent, Bigbux must hold reserves of ________ against its deposits.

Question

Quizplus · Accepted Answer

The reserve requirement states that banks must hold reserves equal to a specified percentage of their deposits. Since the requirement is 12 percent in this example, Bigbux must hold reserves equal to 12 percent of $300 million, or $36 million.

Bigbux Bank Currently Has Deposits of $300 Million