Asked by Gywneth Castro on Jul 12, 2024
Verified
The minimum amount of reserves a bank must hold with the Federal Reserve to back up its deposits is called a(n)
A) excess reserve.
B) time deposit.
C) demand deposit.
D) reserve requirement.
Reserve Requirement
The minimum amount of reserves that banks must hold against deposits, as mandated by central banking authorities to ensure bank liquidity.
Federal Reserve
The central banking system of the United States, responsible for monetary policy, financial regulation, and stability.
Excess Reserve
Funds that banks hold over and above the required minimum reserves mandated by central banking authorities.
- Comprehend the elements and computations related to bank reserves, encompassing total, mandatory, and surplus reserves.
Verified Answer
Learning Objectives
- Comprehend the elements and computations related to bank reserves, encompassing total, mandatory, and surplus reserves.
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