The Minimum Percentage of Deposits That a Depository Institution Must

question 518

Multiple Choice

The minimum percentage of deposits that a depository institution must hold and cannot use for lending is known as the

• A) minimum rate.
• B) required reserve ratio.
• C) money multiplier.
• D) discount rate.

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Definitions:

Profit-Maximizing

A strategy or process by which a firm determines the price and output level that returns the greatest profit.

Loss-Minimizing

A strategy or point where a firm attempts to reduce its losses to the lowest possible level when it cannot achieve profitability.

Efficient Output Level

The quantity of production that maximizes a firm's profit by equating marginal cost and marginal revenue.

Units

A standard quantity or amount used as a measure of a physical quantity, such as length, mass, or time.