Answer the indicated question on the basis of the information in Table 14.2.Each question is based on the original balance sheet.

-Based on the information in Table 14.2,the required reserve ratio is:
A) 30 percent.
B) 20 percent.
C) 15 percent.
D) 10 percent.

Question

Answer the indicated question on the basis of the information in Table 14.2.Each question is based on the original balance sheet.
 
-Based on the information in Table 14.2,the required reserve ratio is:
A) 30 percent. 
B) 20 percent. 
C) 15 percent. 
D) 10 percent.

Quizplus · Accepted Answer

The required reserve ratio can be found by dividing the required reserves by the total deposits. In this case, the required reserves are $60,000 and the total deposits are $400,000. Therefore, the required reserve ratio is:

$60,000 / $400,000 = 0.15 or 15%

Answer the Indicated Question on the Basis of the Information