A Bank Has $50,000 in Deposits from Its Checking Account

question 189

Multiple Choice

A bank has $50,000 in deposits from its checking account customers and loans of $49,000. Of the $49,000 loaned out, $43,000 remains in the checking accounts of the loan recipients. The bank has $50,000 cash on hand, and the reserve requirement is 25%. The reserve ratio for this bank is _____, and it _____ meeting its reserve requirement.

• A) 0.002%; is not
• B) 20%; is
• C) 53.76%; is
• D) 186%; is not