If $1 in cash is held in reserve for every $20 of deposits,the reserve ratio is:
A) 20%.
B) 10%.
C) 5%.
D) 1%.

Name: If $1 in cash is held in reserve for every $20 of deposits,the reserve ratio is: A) 20%. B) 10%. C) 5%. D) 1%.
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Quizplus · Accepted Answer

The reserve ratio is calculated as the amount held in reserve divided by the total amount of deposits. Here, $1 is held for every $20 of deposits, so the reserve ratio is $1/$20 = 1/20 = 0.05, which is 5%.

If $1 in Cash Is Held in Reserve for Every