In the banking system, the required reserve ratio measures Group of answer choices the percentage of total liabilities that the bank must keep on reserve. the amount by which the bank reserves will change if deposits change. the percentage of total deposits that the bank must keep on reserve. the amount by which the money supply will change if bank reserves change.
In the banking system, the required reserve ratio measures Group of answer choices the percentage of total liabilities that the bank must keep on reserve. the amount by which the bank reserves will change if deposits change. the percentage of total deposits that the bank must keep on reserve. the amount by which the money supply will change if bank reserves change.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
In the banking system, the required reserve ratio measures
Group of answer choices
the percentage of total liabilities that the bank must keep on reserve.
the amount by which the bank reserves will change if deposits change.
the percentage of total deposits that the bank must keep on reserve.
the amount by which the money supply will change if bank reserves change.
Expert Solution
Step 1
Required reserve ratio is the minimum amount that must be held by commercial banks. It is decided determined by the central bank of the country. So, in the banking system, the required reserve ratio measures the percentage of total deposits that the bank must keep on reserve.
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