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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

If a bank has $87 million in checkable deposits and it is required to hold $6 million in reserves (required reserves = $6 million), what is the required reserve ratio?

To determine

Identify the required reserve ratio.

Explanation

The required reserve ratio can be calculated by using the following formula:

 Required reserve ratio (r)=Required reservesCheckable deposits        (1)

Since, the required reserves is $6 million and the checkable deposits is $87 million, t

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