In the context of monetary policy, _____ is a rule set by the Fed, which specifies the minimum amount of funds a bank must hold, expressed as a percentage of the bank's deposits.
A)full-reserve banking
B)the statutory framework
C)the reserve requirement
D)statutory liquidity ratio

Question

Quizplus · Accepted Answer

The reserve requirement is a rule set by the Fed that specifies the minimum amount of funds a bank must hold, expressed as a percentage of the bank's deposits. This is used as a tool of monetary policy to control the money supply and influence interest rates. The other options, full-reserve banking, statutory framework, and statutory liquidity ratio, are not directly related to the reserve requirement or monetary policy.

In the Context of Monetary Policy, _____ Is a Rule