If a Bank Is Subject to a Reserve Requirement of 15

question 54

Multiple Choice

If a bank is subject to a reserve requirement of 15%, then it is required to

• A) place 15% of its deposits in the vault.
• B) lend out 15% of its deposits.
• C) place 15% of its deposits in the account with its regional Federal Reserve bank.
• D) place 15% of its deposits in the account with its regional Federal Reserve bank or the vault.

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Definitions:

Population

Population refers to the total number of people living in a particular area or country at a specific time.

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar GDP, essentially adjusting for inflation and allowing for comparisons across time periods by reflecting the prices of all goods and services produced domestically.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year, used to deflate nominal GDP to real GDP.

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate representation of an economy's size and growth over time.