The Minimum Liquidity Requirement Is The

question 89

Multiple Choice

The minimum liquidity requirement is the:

• A) actual amount of reserves that banks must hold.
• B) excess amount of reserves that a bank must hold.
• C) minimum amount of reserves the RBA requires a bank to hold.
• D) total amount of reserves that banks hold at all times.

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Definitions:

Transactions

The economic events of a business that are recorded by accountants.

Revenues and Expenses

Financial metrics reflecting the income earned from normal business operations and the costs incurred to generate that income, respectively.

Operating Activities

Business actions directly related to the production and delivery of goods and services, generating the company’s primary revenue.

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its operational, investing, and financing activities.