The Following Demand Deposits and Cash Reserves at the Fed

question 87

Multiple Choice

The following demand deposits and cash reserves at the Fed have been documented by a bank for the computation of reserve requirements (in millions) . Note that reserves are vault cash and reserves at the Fed.

-What are the average daily demand deposit balances over the reserve computation period beginning the week of June 12?

• A)$286 million.
• B)$296 million.
• C)$306 million.
• D)$326 million.

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Definitions:

Income Inequality

The unequal distribution of household or individual income across the various participants in an economy.

Ability-to-pay Principle

A tax principle that suggests taxes should be levied according to an individual or entity's capacity to pay, reflecting their income or wealth.

Transfer Payments

Payments made by governments to individuals or other entities without the expectation of a direct return or the provision of goods or services, such as social security benefits or subsidies.

Income Distribution

The way in which a nation's total GDP is distributed amongst its population.