A bank has $100,000 in checkable deposits and $30,000 in reserves. If the required reserve ratio is 10%, what is the amount of required reserves?
A) $0
B) $10,000
C) $20,000
D) $30,000

Question

Quizplus · Accepted Answer

The amount of required reserves can be calculated by multiplying the checkable deposits by the required reserve ratio:

$100,000 x 0.10 = $10,000

Therefore, the bank should have $10,000 in required reserves. Since the bank already has $30,000 in reserves, they have exceeded the required reserve amount, so the answer is B.

A Bank Has $100,000 in Checkable Deposits and $30,000 in Reserves