Suppose the Reserve Requirement for Transaction Deposits Is 10% and It

question 4

Multiple Choice

Suppose the reserve requirement for transaction deposits is 10% and it is 5% for nontransaction deposits.What is the total reserve requirement for a bank with total deposits equal to $800 million,if $600 million of these deposits are classified as transaction deposits?

• A) $80 million
• B) $60 million
• C) $70 million
• D) $100 million
• E) None of the above.

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