A commercial bank's checkable-deposit liabilities can be estimated by:
A) Dividing its required reserves by its excess reserves
B) Dividing its required reserves by the reserve ratio
C) Multiplying its required reserves by its excess reserves
D) Multiplying its required reserves by the reserve ratio

Question

Quizplus · Accepted Answer

The checkable-deposit liabilities can be estimated by dividing the required reserves by the reserve ratio, as the reserve ratio is the fraction of deposits that a bank must hold as reserves.

A Commercial Bank's Checkable-Deposit Liabilities Can Be Estimated By