The Percentage of Deposits That Must Be Held as Reserves

question 57

Multiple Choice

The percentage of deposits that must be held as reserves is called

• A) the bank reserve percentage
• B) the required reserve ratio
• C) the excess reserve ratio
• D) the fractional reserve percentage

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Definitions:

Differentiated Products

Products that are similar but distinguished from each other by features, branding, quality, or other attributes.

Tacit Collusion

An unspoken arrangement between firms in a market to set prices or production levels that benefit them at the expense of market competition.

Marginal Costs

The augmented cost incurred by the production of an extra unit of a product or service.

Tacit Collusion

A non-explicit agreement among competitors to limit competition and increase prices or profits without direct communication.