Question

(Q27). If the reserve ratio is 20%, what will be the amount of total reserves after an initial deposit of Rs. 200?
A. 4000
B. 2000
C. 1000
D. 400​

Answer 1

Answer:

hope this helps you... :)

Answer 2

Answer:

Correct option is C. $1000$

Explanation:

Reserve ratio: The reserve ratio is the portion of reservable liabilities that commercial banks must hold onto, rather than lend out or invest.

If the reserve ratio is $20$%, what will be the amount of total reserves after an initial deposit of Rs. $200$.

Formula:

converting the percentage of deposit required to be held in reserves into a fraction.

$\frac{Cash Reserve Ratio Reserve Requirement }{Bank Deposits }$ × $100$

= $\frac{1}{2}$ × $100$

$5$ × $200$

= $1000$

Hence option C is correct.