Changing the Required Reserve Ratio Is an Often-Used Monetary Tool

question 137

True/False

Changing the required reserve ratio is an often-used monetary tool to influence the federal funds rate.

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Definitions:

Certificate Of Deposit

A Certificate of Deposit (CD) is a financial product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time.

Multiple Endorsements

Refers to the practice in banking and finance where a document, such as a check, is signed over to another party multiple times.

Liable

Being legally responsible for something, typically referring to obligations in law.

Primary Liability

The direct and immediate responsibility to fulfill an obligation or repay a debt, without necessarily having recourse against others for reimbursement.