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When does a rational decision maker take an action?
Excess Reserves
The amount of reserves that a bank holds beyond what is required by regulations or reserve requirements.
Federal Reserve
The central banking system of the United States, responsible for monetary policy, including regulating banks, managing the country's money supply, and stabilizing the financial system.
Reserve Requirement
The portion of depositors' balances that banks must have on hand as cash, ensuring banks can meet withdrawal demands.
Money Supply
The total amount of monetary assets available in an economy at a specific time, influencing inflation and economic stability.
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