The minimum amount of total reserves that a depository institution must hold.
A) Excess reserves
B) Required reserves
C) Fractional reserve system
D) Bank reserves

Question

Quizplus · Accepted Answer

Required reserves are the minimum amount of reserves that a depository institution must hold in order to meet reserve requirements set by the central bank. Excess reserves are reserves held by a depository institution above and beyond the required amount. Fractional reserve system refers to the practice of banks keeping only a fraction of their deposits on reserve and lending out the remainder. Bank reserves are the total amount of reserves held by a depository institution, including both required and excess reserves.

The Minimum Amount of Total Reserves That a Depository Institution