The term ___________________ describes the proportion of deposits that the bank must hold in the form of reserves that are not loaned out or invested in bonds. reserve ratio reserve funds term deposits bond reserves'

Respuesta :

The answer is reserve ratio.

The Federal Reserve in the United States sets the minimum amount of cash that each bank must hold, known as the reserve ratio.

In the past, the reserve rate of bank deposits has varied between 0% and 10%.

The minimal amount of cash that financial institutions must keep on hand in order to comply with central bank standards is known as bank reserves.

The bank must store this actual paper money in a vault on the property or in an account with the national bank.

The purpose of the cash reserve regulations is to make sure that every bank has enough cash on hand to handle any significant and unforeseen demand for withdrawals.

Hence, The term reserve ratio describes the proportion of deposits that the bank must hold in the form of reserves that are not loaned out or invested in bonds.

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