A commercial bank's checkable-deposit liabilities can be estimated by
A) dividing its required reserves by its excess reserves.
B) dividing its required reserves by the reserve ratio.
C) multiplying its required reserves by its excess reserves.
D) multiplying its required reserves by the reserve ratio.

Question

Quizplus · Accepted Answer

Checkable-deposit liabilities can be estimated by dividing a bank's required reserves by the reserve ratio, as this ratio determines the fraction of deposits a bank must hold in reserve.

A Commercial Bank's Checkable-Deposit Liabilities Can Be Estimated by