Exhibit 13-1

-Refer to the table in the exhibit.Suppose EuBank is holding no excess reserves.What must the desired reserve ratio be?

Question

Exhibit 13-1
 
-Refer to the table in the exhibit.Suppose EuBank is holding no excess reserves.What must the desired reserve ratio be?

Quizplus · Accepted Answer

To determine the desired reserve ratio that EuBank must hold, we look at the required reserves amount ($100,000) and divide it by the total deposits ($1,000,000). This gives us a required reserve ratio of 10 percent. If EuBank is holding no excess reserves, then it must hold the required reserve amount of $100,000, which corresponds to a desired reserve ratio of 10 percent. Therefore, the correct answer is (C) 10 percent.

Exhibit 13-1 -Refer to the Table in the Exhibit.Suppose EuBank Is Holding