The required reserve ratio refers to: The percentage of excess reserves in the v
ID: 233699 • Letter: T
Question
The required reserve ratio refers to: The percentage of excess reserves in the vault of a bank. Capital stock to total assets. The percentage of deposits that banks must hold in government debt. The percentage of deposits that a bank must keep with the Federal Reserve. If an individual bank receives $ 100,000 in new deposits and the required reserve ratio is 10 percent, the bank must keep the following amount of required reserves with the Fed? $1,000,000. $10,000. Zero. $90,000. Assume that the Fed purchases $10 million in bonds from a bank, the monetary base will: Decrease by $10 million. Remain unchanged. Increase by $5 million. Increase by $10 million. When we say that money has a function as a medium of exchange, this implies that: Money must be in the form of a precious metal such as gold. Money must be set at a fixed exchange rate in international currency markets. Money is used to purchase goods and services rather than resorting to barter. Money is backed by the gold standard.Explanation / Answer
1) The percentage of deposits that a bank must keep with the Federal reserve.
Reserve ratio refers to the percentage of deposits that must be held as reserves in the bank which is set by the Fed
2) 100,000 * 10/100 = $ 10,000