Reserve Requirements Are the

question 83

Multiple Choice

Reserve requirements are the

• A) minimum percentages of deposits that banks must hold as reserves.
• B) minimum amount of an owner's financial resources that must be placed in a depository institution.
• C) rules covering the types of deposits that banks may offer.
• D) rules covering the types of assets that banks may purchase.

---

Definitions:

Perfectly Competitive Industry

An industry structure where many firms produce identical products, entry and exit are easy, and no single firm can influence the market price.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, with a typical downward slope indicating that demand increases as price decreases.

Producer's Surplus

The difference between what producers are willing to accept for a good or service and what they actually receive.

Marginal Cost Curve

A graph showing the change in total production cost that comes from making or producing one additional unit.