Required reserves are the percent of
A) reserves that banks are required to hold as reserves.
B) loans that banks are required to hold as reserves.
C) deposits banks are required to hold as reserves.
D) None of the answers is correct.

Question

Quizplus · Accepted Answer

Required reserves refer to the amount of deposits that banks are required to hold as reserves by the central bank. These reserves cannot be loaned out or invested but must be held as a precautionary measure to meet the demands of depositors and to maintain financial stability.

Required Reserves Are the Percent of