Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 deposit, then its required reserves balance will be:
A) $0.
B) $90.
C) $100.
D) $900.
E) $910

Question

Quizplus · Accepted Answer

The required reserves balance is calculated by multiplying the deposit by the required reserve ratio. In this case, 10% of $1,000 is $100. Therefore, the required reserves balance will be $100.

Imagine That Odyssey National Is a Brand New Bank, and That