Assume that Paris First National Bank is a thriving bank with deposits of $20 million. If the required reserve ratio is 20 percent and the bank is fully loaned out, the bank will keep what amount of required reserves?

Question

Quizplus · Accepted Answer

If the required reserve ratio is 20 percent and the bank has deposits of $20 million, the bank is required to keep 20% of $20 million, which is $4 million, as required reserves.

Assume That Paris First National Bank Is a Thriving Bank