The amount of assets that a bank must hold at all times is determined by the:
A) banks' actual reserves.
B) required reserve ratio.
C) actual reserve requirement.
D) fractional reserve requirement.
E) excess reserve requirement.

Question

Quizplus · Accepted Answer

The amount of assets that a bank must hold at all times is determined by the required reserve ratio, which is set by the central bank. This ratio determines the percentage of deposits that a bank must hold in reserves, either in its own vault or at the central bank.

The Amount of Assets That a Bank Must Hold at All