The Ratio and Proportion Method Relies on the

question 1

Multiple Choice

The ratio and proportion method relies on the .

• A)ability to estimate
• B)use of conversion factors
• C)equality of two ratios
• D)equality of two proportions

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Definitions:

Vault Cash

The physical currency a bank holds in its vault as part of its required reserves or for daily operations.

Monetary Policy

Central bank policies aimed at influencing economic activities through controlling interest rates and supply of money.

Reserve Requirement

The Reserve Requirement is a central banking regulation that sets the minimum amount of reserves each bank must hold as a proportion of its deposits, a tool used to control the money supply.

Open Market Operations

Activities by a central bank to buy or sell government securities in the open market to influence the money supply and interest rates.