Question

Assume that the reserve requirement is 25%. Answer the following questions based on this information. 1. Joe deposits $10,000 in Bank A. How much will Bank A have to keep in reserves

Answer 1

Answer:

$2500

Explanation:

Reserve requirement is the compulsory sum of money that Central Banks require banks to keep as reserves to meet unforeseen circumstances

Reserve = reserve requirement x amount deposited

0.25 x $10,000 = $2500