If the required reserve ratio is 0.08, a bank can lend out:

A) 8 percent of its deposits.

B) 8 percent of its reserves

C) 92 percent of its deposits.

D) 92 percent of its reserves.

C) 92 percent of its deposits.

Explanation:

Since, the reserve ratio represents the portion of deposit that a commercial bank must hold onto, rather than lend out or invest.

i. e. if reserve ratio = a%,

Then the percentage of amount that bank can land out = (100-a) %,

Here,

Reserve ratio = 0.08 = 8%,

Thus, the percentage of amount that bank can land out = (100-8) % = 92%.

i. e. bank can land 92 percent of its deposits.