If the Desired Reserve Ratio Is 3 Percent and Deposits

question 82

Multiple Choice

If the desired reserve ratio is 3 percent and deposits totaled $5.75 billion, banks hold

• A)$172.5 million in reserves.
• B)$0.1725 million in reserves.
• C)$172.5 million in excess reserves.
• D)$0.1725 million in excess reserves.
• E)$192 million in reserves.

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Definitions:

Konrad Adenauer

The first Chancellor of the Federal Republic of Germany (West Germany) from 1949 to 1963, noted for his role in the country's post-war reconstruction and development.

Chancellor

A senior official who heads a government department or a university, varying significantly in specific duties and authority across countries and institutions.

Eastern Bloc

The Eastern Bloc refers to the group of communist states of Central and Eastern Europe, including the Soviet Union, during the Cold War.

Economy

The system of production, distribution, and consumption of goods and services within a particular geographic area or country.