Use the information below to answer the following questions.
Fact 24.3.2
The Bank of Hobbiton has chosen the following initial balance sheet:

-Refer to Fact 24.3.2.Based on the Bank of Hobbiton's initial balance sheet,what is its desired reserve ratio?

Question

Use the information below to answer the following questions.
Fact 24.3.2
The Bank of Hobbiton has chosen the following initial balance sheet:
 
-Refer to Fact 24.3.2.Based on the Bank of Hobbiton's initial balance sheet,what is its desired reserve ratio?

Quizplus · Accepted Answer

The desired reserve ratio can be calculated by dividing the desired reserves by the bank's total deposits. In this case, the desired reserves are $8,500 and the total deposits are $170,000, so the reserve ratio is 5 percent. Therefore, the correct answer is D.

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