Suppose a bank has $200 000 in deposits and $180 000 in loans. What is its reserve ratio?

Question

Quizplus · Accepted Answer

Reserve ratio is the percentage of deposits that a bank holds as reserves. To calculate the reserve ratio, we divide the amount of reserves by the amount of deposits. Reserves = Deposits - Loans
Reserves = $200 000 - $180 000 = $20 000
Reserve ratio = Reserves / Deposits = $20 000 / $200 000
Reserve ratio = 0.1 or 10 percent. Therefore, the correct answer is (C) 10 percent.

Suppose a Bank Has $200 000 in Deposits and $180