The fraction of deposits that banks must keep on hand or at the Federal Reserve is called the

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The required reserve ratio refers to the fraction of deposits that banks are required to keep on hand or with the Federal Reserve. The discount rate is the interest rate at which banks can borrow money from the Federal Reserve. The money multiplier refers to the overall increase in the money supply that results from an initial increase in reserves. The deposit multiplier is not a commonly used term in economics.

The Fraction of Deposits That Banks Must Keep on Hand