It Is Not Always Clear Whether a Person Is an Employee

question 90

Essay

It is not always clear whether a person is an employee. Numerous methods have been developed for examining the nature of the relationship. Describe the various methods which have been established and the relative usefulness of each. Include in your answer an explanation of why the determination is relevant.

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Definitions:

Excess Reserves

Bank reserves that exceed the required minimum amount that financial institutions must hold in reserve against deposit liabilities.

Required Reserves

The minimum amount of reserves that a bank must hold as dictated by central banking regulations, typically a percentage of deposits.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, that lenders charge borrowers for the use of their funds.

Federal Reserve

The central banking system of the United States, responsible for setting monetary policy, regulating banks, maintaining financial stability, and providing banking services.