The Megabux National Bank currently has deposits of $200 million. If the Fed establishes a reserve requirement of 12 percent, Megabux National must hold reserves of _______ against its deposits

Question

Quizplus · Accepted Answer

The reserve requirement is the percentage of deposits that banks are required to hold in reserve. In this case, the reserve requirement is 12 percent of $200 million, which equals $24 million. Therefore, Megabux National must hold reserves of $24 million against its deposits.

The Megabux National Bank Currently Has Deposits of $200 Million