Bank of Sim City has $500 million in deposits. The required reserve ratio is 25%. Bank of Sim City must keep _______ in reserves.

Question

Quizplus · Accepted Answer

The required reserve ratio is 25%, which means the bank must keep 25% of its deposits in reserves. To find out the amount of reserves, we multiply the deposits by the reserve ratio: $500 million x 0.25 = $125 million. Therefore, the correct answer is A) $125 million.

Bank of Sim City Has $500 Million in Deposits