Table 29-4 The following information pertains to the Bank of Edmonton.

-Refer to Table 29-4. If the Bank of Edmonton has loaned out all the money it wants, given its deposits, what is its reserve ratio?
A)1 percent
B)5 percent
C)10 percent
D)15 percent

Question

Table 29-4 The following information pertains to the Bank of Edmonton.
 
-Refer to Table 29-4. If the Bank of Edmonton has loaned out all the money it wants, given its deposits, what is its reserve ratio?
A)1 percent 
B)5 percent 
C)10 percent 
D)15 percent

Quizplus · Accepted Answer

The reserve ratio is the fraction of deposits that a bank holds as reserves. If the Bank of Edmonton has loaned out all the money it wants, it means it is holding the minimum required reserves. Typically, the reserve ratio is around 10 percent, which is a common requirement for banks.

Table 29-4 the Following Information Pertains to the Bank of Edmonton