In the nation of Wiknam, the money supply is $80,000 and reserves are $19,000. Assuming that people hold only deposits and no currency, and that banks hold no excess reserves, then the reserve requirement is

Question

Quizplus · Accepted Answer

The reserve requirement is calculated by dividing the total reserves by the total deposits (money supply) and then multiplying by 100 to get a percentage. In this case, it's ($19,000 / $80,000) * 100 = 23.75%, which rounds to 23.8%, making option B correct.

In the Nation of Wiknam, the Money Supply Is $80,000