The percentage of cash that banks were required to maintain for immediate withdrawal by customers is referred to as the_______.

Question

Quizplus · Accepted Answer

The percentage of cash that banks are required to maintain for immediate withdrawal by customers is referred to as the reserve requirement. It is a tool used by central banks to regulate the money supply in the economy. Option A refers to the purchase or sale of government securities by central banks to influence the money supply, option B refers to a facility that allows banks to borrow funds from the central bank for a short-term period, and option C refers to the interest rate at which banks can borrow money from the central bank.

The Percentage of Cash That Banks Were Required to Maintain