Answer the question on the basis of the following information for the Moolah Bank. $\begin{array} { l r }
\text { Reserves } & \$ 100 \
\text { Checkable Deposits } & 1,000 \
\text { Loans (to customers) } & 300 \
\text { Property } & 400 \
\text { Securities (owned) } & 300 \
\text { Stock Shares } & 100
\end{array}$ Refer to the information.If Moolah Bank is legally "loaned up," the reserve requirement must be:
A) 10 percent.
B) 15 percent.
C) 20 percent.
D) 25 percent.

Question

Answer the question on the basis of the following information for the Moolah Bank. $\begin{array} { l r } 
\text { Reserves } & \$ 100 \
\text { Checkable Deposits } & 1,000 \
\text { Loans (to customers) } & 300 \
\text { Property } & 400 \
\text { Securities (owned) } & 300 \
\text { Stock Shares } & 100
\end{array}$ Refer to the information.If Moolah Bank is legally "loaned up," the reserve requirement must be:
A) 10 percent.
B) 15 percent.
C) 20 percent.
D) 25 percent.

Quizplus · Accepted Answer

The reserve requirement is calculated as reserves divided by checkable deposits. Here, $100 in reserves divided by $1,000 in checkable deposits equals 10 percent.

Answer the Question on the Basis of the Following Information