If Reserve Requirements Are 3 Percent and Capital Requirements Are

question 83

Multiple Choice

If reserve requirements are 3 percent and capital requirements are 10 percent, the bank meets:

• A) reserve requirements but not capital requirements.
• B) neither reserve requirements nor capital requirements.
• C) both reserve and capital requirements.
• D) capital requirements but not reserve requirements.
• E) Not enough information is given.

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Definitions:

Elastic Supply

A situation where the quantity supplied of a good responds significantly to changes in its price.

Subsidy Benefit

Subsidy Benefit refers to the financial advantage received by individuals or businesses from government subsidies, intended to promote certain activities or lower costs.

Elastic Supply

The situation where the quantiry supplied of a good is sensitive to changes in its price.

Subsidy Benefit

Financial assistance granted by the government or a public body to support businesses, industries, or individuals, leading to lower costs or more favorable conditions.