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1 May, 02:12

What does changing the reserve requirement do?

Change the minimum amount you can deposit into your bank account

Allow banks to borrow money to increase their reserve

Change the percentage of deposits a bank must keep in reserve

Allow banks to change their interest rates

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Answers (1)
  1. 1 May, 02:42
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    Change the percentage of deposits a bank must keep in reserve.

    Explanation:

    The reserve requirement refers to a percentage of the amount of money that a bank receives in deposits that have to be kept overnight. According to this, the answer is that changing the reserve requirement changes the percentage of deposits a bank must keep in reserve as when the reserve requirement changes the percentage of the deposits that the bank has to maintain is modified.

    The other options are not right because the reserve requirement doesn't affect the amount you can deposit into your bank account or the interest rates. Also, the reserve requirement is not related to the bank borrowing money.
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