$\text { Assets }\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }$
$\begin{array}{|lc|lc|}
\hline \text { Reserves } & \$ 400 &\text { Deposits }&\$1,200\\text { Loans }&\$800\
\text { Total } & \$ 1,200&\text { Total }&\$1,200 \
\hline
\end{array}$
-In the balance sheet above, the entries are in millions of dollars for the FBN Bank. If the desired reserve ratio on deposits is 10 percent, FBN Bank has desired reserves of
A) $120 million.
B) $700 million.
C) $0.
D) $100 million.

Question

$\text { Assets }\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }$
$\begin{array}{|lc|lc|}
\hline \text { Reserves } & \$ 400 &\text { Deposits }&\$1,200\\text { Loans }&\$800\
\text { Total } & \$ 1,200&\text { Total  }&\$1,200 \
\hline
\end{array}$
-In the balance sheet above, the entries are in millions of dollars for the FBN Bank. If the desired reserve ratio on deposits is 10 percent, FBN Bank has desired reserves of
A) $120 million.
B) $700 million.
C) $0.
D) $100 million.

Quizplus · Accepted Answer

The desired reserve ratio is 10% of deposits, which is 10% of $1,200 million, equaling $120 million.

Assets Liabilities \text { Assets }\quad\quad\quad\quad\quad\quad\quad \text { Liabilities } Assets Liabilities -In the Balance Sheet Above, the Entries Are in Millions

$\text { Assets }\quad\quad\quad\quad\quad\quad\quad \text { Liabilities }$ -In the Balance Sheet Above, the Entries Are in Millions