A goldsmith with 100 gold coins in his safe and 400 goldsmith's receipts in circulation has a reserve ratio of

A) 400%.
B) 100%.
C) 50%.
D) 25%.
E) 20%.

Reserve Ratio

The fraction of deposits that banks are required to keep on hand as reserves, either in their vaults or with the central bank, to ensure liquidity.

Goldsmith's Receipts

Goldsmith's Receipts were historically issued by goldsmiths in the form of promissory notes against the gold deposited with them, leading to the development of banking.