"suppose that the first national bank of joaqin has a customer deposit $300 into his checking account and the bank's reserves increase by $30. What is the reserve ratio?

If the First National Bank of Joaqin has a customer deposit of $300 into its checking account and the bank's reserves increase by $30, the reserve ratio would be of 10%.

Explanation:

The required reserve ratio is the ratio of deposits that banks that accept deposits have to hold in the Federal Reserve. This rule, which was previously enacted to provide protection against bankruptcy risk, is currently used as a market liquidity control tool. Depending on the maturity of the deposit, it is collected at separate rates.

In the case, since the deposit is $300 and the reserve is $30, the reserve ratio is 10% (since 30 is 10 percent of 300).

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