Suppose the desired reserve ratio is 10 percent.If Urban Bank has total deposits of $1,000 and total assets of $10,000,the amount of desired reserves is
A)$100.
B)$900.
C)$1,000.
D)$9,000.
E)$1,100.

Question

Quizplus · Accepted Answer

The desired reserve ratio is 10%, which means that the bank must hold 10% of its deposits as reserves. Therefore, the amount of desired reserves is $100 (10% of $1,000).

Suppose the Desired Reserve Ratio Is 10 Percent