Assume a bank currently holds $75 million in demand deposits, $10 million in vault cash and $25 million deposited at the Federal Reserve. If the required reserve ratio is 15 percent, how much must the bank hold in required reserves?
a. $15.0 million
b. $3.75 million
c. $11.25 million
d. $16.5 million
e. $12.75 million.
C
Economics
You might also like to view...
Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?
A) a drought that sharply reduces cotton output B) an increase in consumer income C) a decrease in consumer income D) unusually good weather that results in a bumper crop of cotton
Economics
Refer to the diagram below. If box E represents government, box C businesses, and box A households, then flows (11) and (12) would represent:
A. Goods and services
B. Government expenditures
C. Resources
D. Net taxes
Economics