Table 10-3
The following information pertains to the Bank of Kamloops.
-Refer to the Table 10-3.If the Bank of Kamloops 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 10-3
The following information pertains to the Bank of Kamloops. 
-Refer to the Table 10-3.If the Bank of Kamloops 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 calculated by dividing the bank's reserves by its deposits. In this case, the bank has reserves of $20 million and deposits of $200 million, so the reserve ratio is:

$20 million / $200 million = 0.10 or 10%

Therefore, choice C) 10 percent is the correct answer.

Table 10-3 The Following Information Pertains to the Bank of Kamloops