QuestionMay 22, 2025

Which of these regulates the amount that a member bank can loan to its customers? A. the prime rate B. the discount rate C. the reserve requirement D. the quantity theory of money

Which of these regulates the amount that a member bank can loan to its customers? A. the prime rate B. the discount rate C. the reserve requirement D. the quantity theory of money
Which of these regulates the amount that a member bank can loan to its customers?
A. the prime rate
B. the discount rate
C. the reserve requirement
D. the quantity theory of money

Solution
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Answer

C. the reserve requirement Explanation 1. Identify the Regulatory Mechanism The reserve requirement is a regulation set by central banks that determines the minimum amount of reserves a bank must hold against deposits. This directly affects how much a bank can loan out.

Explanation

1. Identify the Regulatory Mechanism<br /> The reserve requirement is a regulation set by central banks that determines the minimum amount of reserves a bank must hold against deposits. This directly affects how much a bank can loan out.
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