Asked by Michal Basovich on Jul 15, 2024
Verified
Reserve requirements for checking accounts are ____ those on time deposits.
A) higher than
B) lower than
C) the same as
Reserve Requirements
Rules established by central banks that specify the lowest reserve amount that banks are required to maintain against customer deposits.
Checking Accounts
Bank accounts on which the account holder can draw checks against the money deposited.
Time Deposits
Banking or financial accounts that hold funds for a fixed period, during which the depositor cannot access their money without incurring a penalty.
- Recognize legal and structural aspects of the banking system in the U.S., including the chartering of banks and the distinction between reserve requirements for different types of deposits.
Verified Answer
FM
Fatima MuhammadJul 17, 2024
Final Answer :
A
Explanation :
Reserve requirements for checking accounts are typically higher than those on time deposits because checking accounts are more likely to experience withdrawals, requiring banks to keep more reserves on hand.
Learning Objectives
- Recognize legal and structural aspects of the banking system in the U.S., including the chartering of banks and the distinction between reserve requirements for different types of deposits.