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Assume that the following balance sheet portrays the state of the banking system. The banks currently have no excess reserves.

Assets Liabilities and Net Worth
(Billions of Dollars)
Total reserves 5 Checkable Deposits 50
Loan 25
Securities 20
Total 50 Total 50

What is the required reserve ratio?
a. 5%
b. 40%
c. 10%
d. 25%

Respuesta :

Answer:

c. 10%

Explanation:

The computation of the required reserve ratio is shown below:

Required reserves ratio is

= Total reserves ÷ Checkable Deposits

= $5 ÷ $50

= 0.1

= 10%

Hence, the required reserve ratio is 10%

Therefore the correct option is c.

BY dividing the total reserves from the deposits we can get the required reserve ratio