Final answer:
The reserve ratio is the percentage of a bank's deposits that must be kept on hand as cash, required by monetary policy regulations. It's not possible to determine the Bank of Pleasantville's reserve ratio without relevant numerical data. The concept involves understanding monetary policy, financial regulation, and the money multiplier effect.
Step-by-step explanation:
The question asks about the reserve ratio of the Bank of Pleasantville. The reserve ratio is a banking term that refers to the portion of depositors' balances that banks must have on hand as cash. This is a regulation put in place to ensure banks have the necessary funds available to meet their liabilities and prevent bank runs. It's a concept that falls under monetary policy and financial regulation. From the information provided, it is implied that Singleton Bank has a reserve requirement of 10%, which would be relevant if the Bank of Pleasantville had the same reserve requirement. However, without additional context or numerical values regarding the Bank of Pleasantville, it is not possible to accurately determine its reserve ratio simply from the multiple-choice options listed.
To comprehend reserve ratios better, if a bank has a reserve requirement of 10%, this means that for every dollar deposited, the bank must hold 10 cents in reserve. This reserve can either be held in the bank's vault or at the central bank. The money multiplier is the inverse of this rate, in this case, 1 divided by 0.10, which equals 10. The money multiplier indicates how much an increase in reserves can potentially increase the money supply through banks' lending activities.