Table 29-5.
Bank of Kopeka

-Refer to Table 29-5.The Bank of Kopeka's reserve ratio is
A) 1 percent.
B) 5 percent.
C) 10 percent.
D) 20 percent.

Question

Table 29-5.
Bank of Kopeka
 
-Refer to Table 29-5.The Bank of Kopeka's reserve ratio is
A) 1 percent. 
B) 5 percent. 
C) 10 percent. 
D) 20 percent.

Quizplus · Accepted Answer

The reserve ratio is the percentage of a bank's deposits that it must keep in reserve, either in its own vault or on deposit with the central bank. In this case, the bank's required reserves are $120 million and its deposits are $1,200 million, so the reserve ratio is 10 percent ($120 million divided by $1,200 million).

Table 29-5. Bank of Kopeka