Question

What is the ratio of a deposit that the Fed requires banks to keep in reserve?

Answer 1

Reserve ratio is the ratio of a bank's reserves to the amount of its demand deposits, i.e. its checking deposits. The Fed sets the required minimum ratio, currently 10%. Even with no specified minimum ratio, banks would have to maintain sufficient reserves to cover checks written by depositors and to provide cash on demand.

Answer 2

Answer: The ratio would be letter B

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