Calculating Required Reserves for a Bank
Calculating Required Reserves:
Required Reserves = Checkable Deposits * Required Reserve Ratio
Given that the checkable deposits are $7,000,000 and the required reserve ratio is 10%, we can plug these values into the formula:
Required Reserves = $7,000,000 * 0.10
Required Reserves = $700,000
Therefore, the required reserves for this bank are $0.7 million. So, the correct answer is option a) $0.7 million.