The Minimum Percent of Deposits That Banks Must Hold and Cannot

question 151

Multiple Choice

The minimum percent of deposits that banks must hold and cannot loan is determined by the

• A)interest rate.
• B)discount rate.
• C)required reserve ratio.
• D)federal funds rate.
• E)ratio of M2 to M1.

---

Definitions:

Debtors

Individuals or companies that owe money to another party, often referred to in the context of accounts receivable.

Benefactors

Benefactors are individuals, organizations, or other entities that provide financial or other types of support to individuals, organizations, or causes.

Corporate Form

A business structure where the entity is distinct from its owners, providing limited liability protection, ease of transferring ownership, and potential for growth.

Legal Entities

Organizations that have legal rights and obligations, including the capacity to enter into contracts and own property, distinct from their members.