The Federal Reserve Can Set the Required Reserves for Checkable

question 73

Multiple Choice

The Federal Reserve can set the required reserves for checkable deposits

• A) below 50 percent only if a majority of the governors agree.
• B) above 3 percent only if five of seven governors agree.
• C) at any level it deems necessary in extraordinary circumstances.
• D) by majority vote between the limits of either 4 percent above or below the $1 in reserve per $6 in demand deposit average the Fed would like the bank to retain.
• E) above what banks would normally require to meet day-to-day fluctuations in withdrawals if five of the seven governors agree.

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