If a bank has a reserve ratio of 8 percent, then Group of answer choices the bank loans out at least 8 percent of its deposits. the bank’s ratio of loans to deposits is 8 percent. the bank keeps 8 percent of its deposits as reserves and loans out the rest. the bank charges an interest rate of 8 percent on all loans.

The bank keeps 8 percent of its deposits as reserves and loans out the rest.

If a bank has a reserve ratio of 8 percent, then the bank keeps 8 percent of its deposits as reserves and loans out the rest. This reserve ratio is a regulation that is set by central monetary authorities to ensure that banks have enough cash on hand to meet a certain amount of deposit withdrawals and to maintain the stability of the banking system.

Extra: The reserve ratio is a key component of monetary policy used to control the money supply in the economy. A low reserve ratio means that banks can lend out a higher proportion of their deposits; this can increase the money supply and potentially stimulate economic growth. On the other hand, a high reserve ratio means that banks can lend out a smaller proportion of their deposits; this can decrease the money supply and help to prevent inflation.

The reserve ratio does not dictate how much a bank must loan or the interest rate it charges on loans. The interest rate that banks charge on loans is determined by several factors including market conditions, the credit risk of the borrower, and the bank's own cost of funds. The ratio of loans to deposits can vary and is not directly determined by the reserve ratio; it may be influenced by the bank's lending policies and the demand for loans.

When a bank receives a deposit, it puts a fraction of the deposit (equal to the reserve ratio) in reserve and the rest can be used for making loans or purchasing investment securities. For example, if a bank receives a deposit of $1,000 and the reserve ratio is 8%, the bank will hold $80 in reserve and have the potential to lend out up to $920.