The following table shows the assets and liabilities for Safeco Bank.

-Refer to the table above.What is Safeco Bank's required reserve ratio if the bank has $15,000 in excess reserves?

Question

The following table shows the assets and liabilities for Safeco Bank.
 
-Refer to the table above.What is Safeco Bank's required reserve ratio if the bank has $15,000 in excess reserves?

Quizplus · Accepted Answer

To calculate Safeco Bank's required reserve ratio, we need to divide the required reserves by the total deposits. Required reserves can be calculated as follows: 
Total deposits = $800,000 + $50,000 = $850,000 
Required reserves = $850,000 x 10% = $85,000 
Excess reserves = Total reserves - Required reserves 
$15,000 = Total reserves - $85,000 
Total reserves = $100,000 
Required reserve ratio = Required reserves / Total deposits 
Required reserve ratio = $85,000 / $850,000 = 10% 
Therefore, the answer is B (10 percent).

The Following Table Shows the Assets and Liabilities for Safeco