A bank has checkable deposits of $1,000,000, loans of $600,000, and government securities of $400,000.If the required reserve ratio is 5 percent, the amount of required reserves is
A) $1,00,000
B) $30,000
C) $500,000
D) $30,000.
E) $20,000.

Question

Quizplus · Accepted Answer

The required reserve ratio is 5 percent, so required reserves would be 0.05 x $1,000,000 = $50,000.

A Bank Has Checkable Deposits of $1,000,000, Loans of $600,000