Requiring Minimum Reserves to Be Held at the Central Bank

question 39

Multiple Choice

Requiring minimum reserves to be held at the central bank is the equivalent of

• A)buffer reserves.
• B)a reserve requirement tax.
• C)the target reserve ratio.
• D)contagious effects of liquidity risk.

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Definitions:

Schema

A cognitive framework or concept that helps organize and interpret information, allowing individuals to make sense of the world.

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The way in which information and knowledge are organized and stored in the mind.

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Mental connections between concepts, events, or objects, which often influence memory and learning.

William James

A pioneering American psychologist and philosopher who was a leading thinker of the late 19th century, known for his work in pragmatism and functional psychology.