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Reserve Ratio
The reserve ratio is the fraction of deposits that a bank is required to hold in reserve and not lend out, set by the central bank to control the money supply.
Money Multiplier
A concept that describes the amount of money that banks can generate with each dollar of reserves.
Percent
A mathematical term describing one hundredth of a particular quantity; a unit of proportion or rate expressed as a fraction of 100.
Reserves
Funds or assets that banks must hold either in their own vaults or on deposit with a central bank, to meet expected withdrawal demands or regulatory requirements.
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