Use the information below to answer the following questions.
Fact 24.3.1
The Bank of Speedy Creek has chosen the following initial balance sheet:

-Refer to Fact 24.3.1.Based on the Bank of Speedy Creek's initial balance sheet,what is its desired reserve ratio?

Question

Use the information below to answer the following questions.
Fact 24.3.1
The Bank of Speedy Creek has chosen the following initial balance sheet:
 
-Refer to Fact 24.3.1.Based on the Bank of Speedy Creek's initial balance sheet,what is its desired reserve ratio?

Quizplus · Accepted Answer

The desired reserve ratio is calculated as the ratio of required reserves to total deposits. In this case, the required reserves are $200,000 (given as a fixed amount), and the total deposits are $2,500,000. Therefore, the desired reserve ratio is 8 percent ($200,000 divided by $2,500,000).

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