If the desired reserve ratio is 3 percent and deposits totaled $575 billion, banks would hold
A) $17.25 billion in reserves.
B) $17.25 billion in excess reserves.
C) $1,725 billion in currency.
D) $534.75 in reserves.

Question

Quizplus · Accepted Answer

To calculate the required reserves, we need to multiply the deposits by the desired reserve ratio: 
$575 billion x 3% = $17.25 billion 
Therefore, banks would hold $17.25 billion in reserves.

If the Desired Reserve Ratio Is 3 Percent and Deposits