Use the balance sheet for the following questions.
Table 29-2

-Refer to Table 29-2.The reserve ratio is
A)0 percent.
B)20 percent.
C)80 percent.
D)100 percent.

Question

Use the balance sheet for the following questions.
Table 29-2
 
-Refer to Table 29-2.The reserve ratio is
A)0 percent. 
B)20 percent. 
C)80 percent. 
D)100 percent.

Quizplus · Accepted Answer

The reserve ratio is calculated as total reserves divided by total deposits. In this case, the total reserves are $100,000 and the total deposits are $500,000, so the reserve ratio is 20 percent (or 0.2). Therefore, the correct answer is B).

Use the Balance Sheet for the Following Questions