The Purpose of Cash Reserves as Required by the FED

question 4

Multiple Choice

The purpose of cash reserves as required by the FED are best described as

• A) Cash placed on deposit with the FED at no interest as a cushion to meet emergency requirements of member banks
• B) Cash held off the market to controlled interest rates
• C) A source of income for the fed
• D) A better control over a bank's lending policies

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Definitions:

Social

Relating to society or its organization; pertaining to activities involving interaction with other people.

Valence

The value to the individual of various work outcomes.

Equity Theory

A theory of motivation that suggests individuals assess their job satisfaction based on the ratio of inputs to outcomes and compare it to the perceived ratio of others.

Expectancy Theory

Argues that work motivation is determined by individual beliefs regarding effort–performance relationships and work outcomes.