Sumit deposits $1,500 cash into his checking account, which the bank holds in its vault. The reserve requirement is 25%. What is the change in his bank's required reserves?

Question

Quizplus · Accepted Answer

The reserve requirement is 25%, meaning the bank is required to keep 25% of Sumit's deposit ($1,500) as reserves. Therefore, the bank's required reserves increase by $375 (25% of $1,500).

Sumit Deposits $1,500 Cash into His Checking Account, Which the Bank