The Fed requires that all of its member banks hold funds called "reserves," equal to a stated percentage of the deposits held by their customers. This percentage is called the reserve requirement.

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This statement is true. The Federal Reserve sets reserve requirements for its member banks as a way to control the amount of money in circulation and to ensure that banks have enough funds to meet their obligations. The reserve requirement is expressed as a percentage of the bank's total deposits, and banks must hold this amount in reserve either in cash or on deposit at the Federal Reserve Bank.

The Fed Requires That All of Its Member Banks Hold