The Fed Requires That All of Its Member Banks Hold

question 3

True/False

The Fed requires that all of its member banks hold funds called "reserves," equal to a stated percentage of the deposits held by their customers. This percentage is called the reserve requirement.

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Definitions:

Reaction

A chemical change that occurs when substances combine or decompose forming new compounds.

Boiling Point

The temperature at which a liquid’s vapor pressure equals the external pressure surrounding the liquid, causing it to turn into vapor.

Molecules

The smallest unit of a chemical compound that can exist, composed of two or more atoms bonded together chemically.

Compound Name

The designation of a chemical substance based on its composition and structure.