ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The required reserve ratio gives the percent of deposits that banks must hold as reserves. It is the ratio of required reserves to deposits. If the required reserve ratio is 10 percent this means that banks must hold 10 percent of their deposits as required reserves.

Detailed explanation-2: -In the U.S., the Federal Reserve dictates the amount of cash, called the reserve ratio, that each bank must maintain. Historically, the reserve rate has ranged from zero to 10% of bank deposits. Bank reserves are the minimal amounts of cash that banks are required to keep on hand in case of unexpected demand.

Detailed explanation-3: -The correct option is (B) required reserves. The amount of deposits that banks must hold in reserve is required reserve.