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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Checkable deposits are $50 million, and required reserves are $4 million. What is the required reserve ratio?

To determine

Identify the required reserves ratio.

Explanation

The required reserves can be calculated by using the following formula:

 Required reserves =r× Checkable deposits        (1)

Here,

r is the required reserve ratio

Since, the required reserves is $4 million and the checkable deposits is $50 million, the value of required reserve ratio can be calculated by using the Equt

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