If checkable deposits in the first National Bank total $550 million and the required reserve ratio is 10 percent, then required reserves for first National Bank is
A)$50 million.
B)$55 million.
C)$7 million..
D)$10 million..

Question

Quizplus · Accepted Answer

Required reserves are calculated by multiplying the total checkable deposits by the required reserve ratio. In this case, $550 million * 10% = $55 million.

If Checkable Deposits in the First National Bank Total $550