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A Bank Has $200 of Reserves and $4,000 of Deposits

question 194

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A bank has $200 of reserves and $4,000 of deposits.It is just meeting its desired reserves and has no excess reserves.Thus the desired reserve ratio is

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Definitions:

Elastic

Describing a situation in economics where the demand or supply for a good or service significantly changes in response to changes in price.

Tax Rates

The percentage at which an individual or corporation is taxed, which can vary based on income level, type of goods or activities.

Elasticities

Measures of how much the quantity demanded or supplied of a good responds to changes in prices, income, or other factors.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various price levels at a given point in time.

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