What is the purpose of a bank's reserve requirement?

Practice Questions

Q1
What is the purpose of a bank's reserve requirement?
  1. To ensure banks have enough cash to meet customer withdrawals
  2. To limit the amount of loans banks can issue
  3. To control inflation rates
  4. To increase the bank's profitability

Questions & Step-by-Step Solutions

What is the purpose of a bank's reserve requirement?
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