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.

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