Suppose a bank has $8 million in deposits and a reserve ratio of 20 percent. Its required reserves are
A) $40,000.
B) $400,000.
C) $1,600,000.
D) $16,000,000.

Name: Suppose a bank has $8 million in deposits and a reserve ratio of 20 percent. Its required reserves are A) $40,000. B) $400,000. C) $1,600,000. D) $16,000,000.
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Quizplus · Accepted Answer

Required reserves are calculated as the deposit amount multiplied by the reserve ratio. Here, $8 million * 20% = $1,600,000.

Suppose a Bank Has $8 Million in Deposits and a Reserve