If the required reserve ratio is one-third,currency in circulation is $300 billion,and checkable deposits are $900 billion,then the currency-deposit ratio is

Question

Quizplus · Accepted Answer

The required reserve ratio is one-third, so banks must keep one-third of checkable deposits in reserve. 
Total checkable deposits are $900 billion, so the required reserves are ($900 billion)(1/3) = $300 billion. 
Currency in circulation is also $300 billion. 
Therefore, the currency-deposit ratio is $300 billion (currency) / $900 billion (deposits) = 1/3 = 0.33.

If the Required Reserve Ratio Is One-Third,currency in Circulation Is