Which of the following is a valid statement?
A) Required reserve ratio = required reserves as a percentage to total deposits.
B) Required reserves = the maximum reserves required by the Fed.
C) Excess reserves = total reserves plus required reserves.
D) All of the above.

Question

Quizplus · Accepted Answer

Option A is a valid statement as it accurately defines the required reserve ratio as the percentage of total deposits that banks are required to keep as reserves. Option B is not correct because the maximum reserves required by the Fed is known as the legal reserve requirement. Option C is incorrect because excess reserves are defined as total reserves minus required reserves, not total reserves plus required reserves.

Which of the Following Is a Valid Statement