Asked by Brendan Callanan on Jun 14, 2024
Verified
The reserve ratio is equal to required reserves divided by __________.
Reserve Ratio
A requirement set by central banks determining the minimum amount of reserves a bank must hold against deposits, influencing the bank's capacity to lend and create money.
Required Reserves
The minimum amount of funds that a bank or financial institution must hold in reserve, as mandated by a central bank or regulatory authority, to ensure financial stability and liquidity.
- Learn about the workings of banking systems, particularly in relation to reserve mandates.
Verified Answer
Learning Objectives
- Learn about the workings of banking systems, particularly in relation to reserve mandates.
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