Which of the Following Is False

question 58

Multiple Choice

Which of the following is false?

• A)The Fed sets the required reserve ratio that determines the maximum amount of money that banks can lend.
• B)Depository institutions must hold reserve assets equal to a fraction of deposit liabilities; that fraction is called the required reserve ratio.
• C)The Fed controls the amount of cash assets available for reserves.
• D)The Fed must consult with depository institutions before setting the required reserve ratio.

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