The reserve requirement prescribed by the Fed that all banks must hold is
A) 9 percent of their deposits as reserves.
B) 10 percent of their deposits as reserves.
C) 12 percent of their deposits as reserves.
D) 15 percent of their deposits as reserves.
E) 25 percent of their deposits as reserves.

Question

Quizplus · Accepted Answer

The Federal Reserve typically sets reserve requirements for banks to ensure they have enough funds on hand to meet demand for withdrawals. Historically, a common requirement has been 10 percent of deposits, though this can vary and has been subject to change, including temporary adjustments to 0% during the COVID-19 pandemic as part of broader monetary policy measures.

The Reserve Requirement Prescribed by the Fed That All Banks