Table 29-3.
The First Bank of Johnson City

-Refer to Table 29-3.The reserve ratio for this bank is
A) 0 percent.
B) 20 percent.
C) 80 percent.
D) 100 percent.

Question

Table 29-3.
The First Bank of Johnson City
 
-Refer to Table 29-3.The reserve ratio for this bank is
A) 0 percent. 
B) 20 percent. 
C) 80 percent. 
D) 100 percent.

Quizplus · Accepted Answer

The reserve ratio can be calculated as the total amount of reserves held by the bank divided by the total deposits. In this case, the total reserves are $40 million and the total deposits are $200 million, giving a reserve ratio of 20 percent (40/200 = 0.2). Therefore, the correct answer is B) 20 percent.

Table 29-3. The First Bank of Johnson City