Suppose that the reserve ratio is 10 percent and that a bank has $2,000 in deposits.Its reserves are
A)$20.
B)$200.
C)$1,880.
D)$1,800.

Name: Suppose that the reserve ratio is 10 percent and that a bank has $2,000 in deposits.Its reserves are A)$20. B)$200. C)$1,880. D)$1,800.
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Question

Quizplus · Accepted Answer

The reserve ratio is 10 percent, which means the bank is required to hold 10% of its deposits in reserves. Therefore, the bank's reserves would be 10% of $2,000, which is $200. Therefore, the correct answer is B.

Suppose That the Reserve Ratio Is 10 Percent and That