The Fed Has Just Reduced the Reserve Requirement from 14

question 15

True/False

The Fed has just reduced the reserve requirement from 14% to 12%. Bigbux Bank holds $650 million in deposits. It will need to become more conservative with its lending procedures because it now must hold $78 million in reserves.

---

Definitions:

Realistic

Pertaining to the acceptance and representation of things as they truly are, emphasizing practical and factual views over imagination or speculation.

Empathy

The ability to understand and share the feelings of another person from their perspective.

Concrete Thinking

Involves focusing on the physical world and the direct experience, rather than abstract or hypothetical concepts.

Industry

The economic activity concerned with the processing of raw materials and manufacture of goods in factories.