A financial depository institution's reserve requirement is a specified percentage of:
A) deposits that must be kept as actual reserves.
B) required reserves that must be kept as actual reserves.
C) excess reserves that must be backed by required reserves.
D) actual reserves that must be kept at a Federal Reserve bank.

Question

Quizplus · Accepted Answer

A reserve requirement is the fraction of deposits that a bank is required to hold in reserve, either in its own vaults or at a central bank, and not lend out.

A Financial Depository Institution's Reserve Requirement Is a Specified Percentage