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If the Required Reserve Ratio Is 20% and a Bank

question 50

Essay

If the required reserve ratio is 20% and a bank has $1 million in demand deposits, how much reserves must the bank keep with the Federal Reserve Bank?


Definitions:

Percentile

A measure used in statistics to indicate the value below which a given percentage of observations in a group of observations falls.

Measures of Dispersion

Statistical indicators that describe the spread or variability of a data set.

Mode

The value that appears most frequently in a given set of data.

Range

The difference between the highest and lowest values in a dataset, providing a measure of data dispersion.

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