Decided to raise the amount banks must keep in their vault

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Reference no: EM131437099

1. The Federal Reserve has recently decided to raise the amount banks must keep in their vault from 10% to 20%. If you deposit $25,000 into your savings account, how much of the $25,000 can the bank loan out?

a. $20,000 b. $2350 c. $9500 d. $22,000 e. $22,500

2. To help protect depositors, the Federal Reserve requires banks to keep a percentage of their deposits in their vault, which cannot be loaned out. This is called the:

a. Prime Rate b. Open Market Rate c. Discount Rate d. Demand Deposits e. Reserve Requirement

Reference no: EM131437099

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