Question

If a bank had demand deposits of $50 million and it faced a 25 percent reserve requirement, it would be required to have how many reserves

Answer 1

Answer:

$12.5 million

Explanation:

The computation of the number of reserves required is shown below:

= Demand deposits × reserve requirement

= $50 million × 25%

= $12.5 million

We simply applied the demand deposits with the reserve requirement so that the number of reserve required could come