Suppose that the reserve ratio is 7 percent and that a bank has $2000 in deposits. What are its required reserves?
A)$100
B)$120
C)$140
D)$160

Question

Quizplus · Accepted Answer

To find the required reserves, we need to multiply the deposits by the reserve ratio.

Required reserves = Deposits x Reserve Ratio
Required reserves = $2000 x 0.07
Required reserves = $140

Therefore, the answer is C) $140.

Suppose That the Reserve Ratio Is 7 Percent and That