Managing a bank's reserve position requires knowing only the target reserve ratio and the period over which reserves must be maintained.

Question

Quizplus · Accepted Answer

Managing a bank's reserve position requires continuous monitoring and adjustment based on various factors such as actual deposit levels, loan demand, and fluctuations in the economy. The target reserve ratio and period are important inputs for planning, but they are not sufficient for effective management of reserve positions.

Managing a Bank's Reserve Position Requires Knowing Only the Target