The minimum amount of reserves a bank is required to hold is known as

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Required reserves are the minimum amount of reserves that a bank is required to hold by law. This reserve requirement is set by central banks such as the Federal Reserve in the United States. Banks can hold additional reserves, known as excess reserves, which can be used to lend out to customers or to meet unexpected withdrawal demands. The money multiplier refers to the amount of money that can be created through the lending process, and total reserves refer to the combined amount of required and excess reserves held by a bank.

The Minimum Amount of Reserves a Bank Is Required to Hold