-The above table gives the initial balance sheet for Mini Bank. Mini Bank's actual reserve ratio equals
A) 25 percent.
B) 12.5 percent.
C) 33.3 percent.
D) 20 percent.

Question

-The above table gives the initial balance sheet for Mini Bank. Mini Bank's actual reserve ratio equals
A) 25 percent. 
B) 12.5 percent. 
C) 33.3 percent. 
D) 20 percent.

Quizplus · Accepted Answer

The reserve ratio is calculated as the bank's reserves divided by its deposits. If the bank's reserves are $25 million and its deposits are $100 million, the reserve ratio is 25% ($25 million / $100 million = 0.25 or 25%).

-The Above Table Gives the Initial Balance Sheet for Mini