When an Increase in the Price of One Good Lowers

question 97

True/False

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

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Definitions:

Reserve Requirement

The minimum amount of reserves that banks must hold against deposits, as mandated by central banks.

Fractional Reserve

A banking system in which only a fraction of bank deposits are backed by actual cash on hand, with the rest being available for loans.

Banking System

The network of banks and financial institutions that provide financial services to consumers, businesses, and other banks.

Reserve Ratio

The fraction of deposits that a bank must hold in reserve and not lend out, as required by monetary authorities.