The International Monetary Fund Divides Nations into Three Groups

question 181

Essay

The International Monetary Fund divides nations into three groups.What are the three groups and what are the characteristics of each group?

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Definitions:

Excess Reserves

Excess reserves refer to the capital reserves held by a bank or financial institution in excess of what is required by regulations, guidelines, or central bank requirements.

Individual Bank

A financial institution that deals with consumers and businesses to offer deposit, loan, and investment services on an individual basis.

Discount Rate

The cost in interest that commercial banks and similar storage institutions incur on borrowing from their regional Federal Reserve Bank’s loaning service.

Federal Reserve District Banks

The 12 banks that make up the Federal Reserve System, serving as the central banking system of the United States, each serving a specific geographic district.