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the portion of a deposit that a bank must keep on hand
What else can I help you with?
If the money multiplier is 4, what is the required reserve ratio (RRR)?
25 percent
What is Reserve requirement ratio?
The Required Reserve Ratio is the percentage/fraction of required reserves that should be held for every dollar of deposits in a depository institution that is required by the Federal Reserve.
Under a fractional reserve banking system the amount of money loaned out can only increase if what happens?
The required reserve ratio is lowered.
What describes how lowering the required reserve ratio reduces the money supply?
When the required reserve ratio is lowered, banks can loan out more money.
What does RRR stand for?
If this answer has anything to do with history and government, the actual words RRR stand for are Reserve Requirement Ratio(there are a lot of others that refer to the same abbreviation in other areas, such as "reduce, reuse, and recycle", and are totally different things). The RRR is the amount a bank must keep in reserves; it removes money from the economy. There is an inverse relationship between the RRR and the money supply; an increase in RRR leads to a decrease in the money supply, and a decrease in RRR leads to a decrease in the money supply.
What accurately describes how raising the required reserve reserve ratio reduces the money supply?
When the required reserve ratio is raised, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
Why is raising the required reserve ratio results in a decrease in the money supply?
When the required reserve ratio is high, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
What accurately describes how raising the required reserve ratio reduces the money supply?
When the required reserve ratio is raised, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
What best explains why raising the required reserve ratio results in a decrease in the money supply?
When the required reserve ratio is high, must loan out a smaller portion of their reserves, resulting in fewer loans.
Which of the following best explains why raising the required reserve ratio results in a decrease in the money supply?
When the required reserve ratio is high, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
What accurately describes how lowering the required reserve ratio increases the money supply?
When the required reserve ratio is lowered, banks can loan out more money.
What accurately describes how raising the required reserve ratios reduces the money supply?
When the required reserve ratio is raised, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
