When Computing the Mean, the Smallest Value

question 42

Multiple Choice

When computing the mean, the smallest value

• A) can never be negative.
• B) can never be zero.
• C) can never be less than the mean.
• D) can be any value.

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Definitions:

Required Reserve

The minimum amount of funds that a bank must hold in reserve against deposits made by customers, as mandated by central banking authorities.

Excess Reserves

The amount of reserves that a bank holds beyond the required minimum, which can potentially be lent out to create new money.

Excess Reserves

The funds that banks hold over and above the required reserve ratio set by the central bank, which can be loaned out or invested.

Required Reserves

The portion of depositors' balances that banks must have on hand as cash or in reserves at a central bank, used as a measure to ensure liquidity.