Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve,

Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve, one million dollars in required reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in vault cash.

A) two
B) eight
C) nine
D) ten

Answer: The correct answer is two.

Loading

Leave a Reply

Your email address will not be published.