The required reserve ratio is the percentage of checkable deposits that must be held as reserves.

Question

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This statement is true. The required reserve ratio is set by the central bank and represents the portion of checkable deposits that banks must hold in reserve either in cash or on deposit with the central bank. It is used as a tool to regulate the amount of money that can be created through the process of lending and deposit creation.

The Required Reserve Ratio Is the Percentage of Checkable Deposits