Refer to Table 10.1. The required reserve ratio First Commercial Bank Assets Liabilities + Net Worth Reserves $200,000 $1 million Deposits Required -- $200,000 Net Worth Excess $50,000 Loans -- Total $1.2 million $1.2 million Total

Refer to Table 10.1. The required reserve ratio First Commercial Bank Assets Liabilities + Net Worth Reserves $200,000 $1 million Deposits Required -- $200,000 Net Worth Excess $50,000 Loans -- Total $1.2 million $1.2 million Total

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter19: Money Creation

Section: Chapter Questions

Problem 7SQ

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Question

Refer to Table 10.1. The required reserve ratio

First Commercial Bank
Assets	Liabilities + Net Worth
Reserves	$200,000	$1 million	Deposits
Required	--	$200,000	Net Worth
Excess	$50,000
Loans	--
Total	$1.2 million	$1.2 million	Total

is 15%.

is 10%.

is 12.5%.

cannot be determined from the given information.

Definition Definition Minimum amount that a commercial bank must hold in liquid assets in order to fulfill central bank regulations.

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