Table 29-4

-Refer to Table 29-4.If the Bank of Tampa has loaned out all the money it wants given its deposits,then its reserve ratio is
A)1%
B)5%
C)10%
D)20%

Question

Table 29-4
 
-Refer to Table 29-4.If the Bank of Tampa has loaned out all the money it wants given its deposits,then its reserve ratio is
A)1% 
B)5% 
C)10% 
D)20%

Quizplus · Accepted Answer

The reserve ratio is defined as the fraction of deposits that banks hold as reserves. In this table, the Bank of Tampa has total deposits of $1,000 and reserves of $100. Therefore, its reserve ratio is calculated as follows:
Reserve ratio = (Reserves/Deposits) x 100
= ($100/$1,000) x 100
= 10%
Thus, the best choice is (C) 10%.

Table 29-4 -Refer to Table 29-4.If the Bank of Tampa Has Loaned