Macroeconomics

Reserve Requirement

Definition

What is Reserve Requirement?

The proportion of eligible deposits banks must hold as reserves.

Example in practice

A higher reserve requirement can reduce banks' lending capacity.

Keep learning

The total market value of final goods and services produced within a country during a period.

Gross domestic product adjusted for changes in prices.

Gross domestic product measured at current prices without adjusting for inflation.

A market environment in which investors favour higher-risk assets.

Think you know your investing terms?

Put your knowledge to the test with a quick quiz.