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2 April, 20:11

If Bank of Mateer has a required reserve ratio of 40 percent and there is $100,000 in deposits, what is the amount of required reserves? a. $40,000 b. $15,000 c. $100,000 d. $60,000 e. $0

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Answers (2)
  1. 2 April, 21:34
    0
    Option (a) is correct.

    Explanation:

    Required reserve ratio refers to the ratio that banks have to kept with their nation's central bank and the central bank uses this ratio for controlling the money supply in an economy.

    Given that,

    Required reserve ratio = 40 percent

    Amount of deposits = $100,000

    Amount of required reserves:

    = 40% of Amount of deposits

    = 0.4 * $100,000

    = $40,000
  2. 2 April, 22:13
    0
    Option (a) $40,000

    Explanation:

    Data provided in the question:

    Required reserve ratio = 40 percent

    Deposits = $100,000

    Now,

    we know that

    Required reserves = Amount of Deposits * Required Reserve ratio

    or

    Required reserves = $100,000 * 40%

    or

    Required reserves = $100,000 * 0.40

    or

    Required reserves = $40,000

    Hence,

    Option (a) $40,000
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