The Fed Has Just Reduced the Reserve Requirement from 14

question 195

True/False

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.

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Definitions:

Ritalin

A stimulant medication commonly used to treat Attention Deficit Hyperactivity Disorder (ADHD) and narcolepsy, known generically as methylphenidate.

Peak Clinical Effectiveness

The point at which a drug achieves its maximum therapeutic effect.

Attention Deficit Disorder

is a neurological disorder characterized by inattention, impulsivity, and, in some cases, hyperactivity.

University Student

An individual enrolled in a higher education institution to pursue academic degrees or professional qualifications.