The Federal Reserve can set the required reserves for checkable deposits
A) below 50 percent only if a majority of the governors agree.
B) above 3 percent only if five of seven governors agree.
C) at any level it deems necessary in extraordinary circumstances.
D) by majority vote between the limits of either 4 percent above or below the $1 in reserve per $6 in demand deposit average the Fed would like the bank to retain.
E) above what banks would normally require to meet day-to-day fluctuations in withdrawals if five of the seven governors agree.

Question

Quizplus · Accepted Answer

The Federal Reserve has the authority to set the required reserves for checkable deposits at any level it deems necessary in extraordinary circumstances. This means that in times of financial crises or emergencies, the Fed can change the required reserve ratio without any restriction on the level it sets.

The Federal Reserve Can Set the Required Reserves for Checkable