The desired reserve ratio refers to the ratio of a bank's:
A)reserves to its liabilities and net worth.
B)stock shares to its total assets.
C)demand deposits to its total liabilities.
D)specified percentage of deposit liabilities a chartered bank chooses to keep as vault cash.

Question

Quizplus · Accepted Answer

The desired reserve ratio refers to the specified percentage of deposit liabilities a chartered bank chooses to keep as vault cash. It is not related to the bank's reserves to its liabilities and net worth or stock shares to its total assets. While demand deposits are a component of a bank's total liabilities, they do not directly relate to the desired reserve ratio.

The Desired Reserve Ratio Refers to the Ratio of a Bank's