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How does the reserve requirement tool affect the ability of deposit – type financial         institutions to...

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Finance

How does the reserve requirement tool affect the ability ofdeposit – type financial        institutions to create money?   What are the principaladvantages and   disadvantage the reserve requirementtool?

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The reserve requirement is also known as the cash reserve ratio Reserve requirements are the amount of funds that a bank holds in reserve to ensure that it is able to meet liabilities in case of sudden withdrawals    See Answer
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How does the reserve requirement tool affect the ability ofdeposit – type financial        institutions to create money?   What are the principaladvantages and   disadvantage the reserve requirementtool?

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