Reserve requirements that may be imposed on an economy's banks by its central bank specify that banks by its central bank specify that banks reserve must be a minimum percentage of them ?
Correct answer: B. deposits
- A. assets
- B. deposits
- C. loans
- D. government bonds
Explanation
Reserve requirements specify the minimum fraction of customer deposits that banks must retain as reserves rather than lend out. The requirement is therefore stated as a percentage of deposits.
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