Economic Glossary | Reserve Ratio | Bankers Algo
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Economic Glossary

    Economic Terms starting with R


    Reserve Ratio

The amount of reserves required by the Federal Reserve System as a ratio of the amount deposits backed by the reserves. Modern reserve ratios are in the range of 1-3% for checkable deposits. The reserve ratio plays a key role in the deposit multiplier. The simple deposit multiplier is simply the inverse of the reserve ratio. If the reserve ratio is 5%, then the deposit multiplier is 20. It's just that simple.


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Word of the day

Famish(v)

Meaning:

Reduce someone to extreme hunger

Synonyms: abstain, deny oneself, diet, fast

Antonyms: eat, glut, gorge, stuff

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What is the sum of positive integers less than 100 which leave a reminder 1 when divided by 3 and leave a remainder 2 when divided by 4?

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