The base amount of transaction deposits for a depository institution above which the legal reserve requirement changes to ten percent is known as:
A)reserve base.
B)reserve tranche.
C)base limit.
D)limit tranche.
E)cut-off tranche.

Question

Quizplus · Accepted Answer

The reserve tranche refers to the portion of a depository institution's deposits that is subject to a different (usually higher) reserve requirement. This term is specifically used in the context of the Federal Reserve's requirements in the United States, where different tiers of deposits have different reserve requirements.

The Base Amount of Transaction Deposits for a Depository Institution