-Refer to Table 10-3. If the Bank of Kamloops has loaned out all the money it wants, given its deposits, what is its reserve ratio?
A) 1 percent
B) 5 percent
C) 10 percent
D) 15 percent

Question

-Refer to Table 10-3. If the Bank of Kamloops has loaned out all the money it wants, given its deposits, what is its reserve ratio?
A) 1 percent 
B) 5 percent 
C) 10 percent 
D) 15 percent

Quizplus · Accepted Answer

The reserve ratio is calculated by dividing the bank's reserves by its total deposits. If the Bank of Kamloops has loaned out all it wants, implying it is holding only the required reserves, and given that typical reserve ratios are around 10%, option C is the logical choice without specific numbers from Table 10-3.