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15-07-2021
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Suppose a bank has $400 million in deposits and $25 million in required reserves, and it is holding no excess reserves. What is the required reserve ratio?

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andromache andromache

19-07-2021

Answer:

the required reserve ratio is 6.25%

Explanation:

The calculation of the required reserve ratio is given below:

Required reserve ratio is

= required reserves ÷ deposits

= $25 ÷ $400

= 0.0625

= 6.25%

Hence, the required reserve ratio is 6.25%

The same is to be relevant and considered too

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