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The Fed Has Just Reduced the Reserve Requirement from 14

question 195

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The Fed has just reduced the reserve requirement from 14% to 12%. Commerce Bank holds $650 million in deposits. It will need to become more conservative with its lending procedures because it now must hold $91 million in reserves.


Definitions:

Vertical Merger

A business combination of companies that operate along the same supply chain but at different stages of production.

Horizontal Merger

The combination of two or more firms competing in the same industry and at the same stage of production, aimed at increasing market share.

Conglomerate Merger

A merger between companies that operate in completely different industries.

Diagonal Merger

A merger between companies in unrelated business activities, potentially for strategic integration or diversification.

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