A bank has $10 million in vault cash and $110 million in deposits if total bank reserves were $15 million with $2 million considered to be excess reserves, what required reserves ratio is implied?
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A bank has $10 million in vault cash and $110 million in deposits if total bank reserves were $15 million with $2 million considered to be excess reserves, what required reserves ratio is implied?
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Required reserves ratio = reserves/deposit
Deposit = $110 million
Reserves = $13 million ($15 -2)
$13/$110 = .1182 x 100 = 11.82%
11.82% is the required reserves ratio
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