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The rule that member banks must keep part of their deposits in cash or at a district bank is the:
AReserve replacement
BReserve requirement
CReserve retirement
DReserve refinement
Answer & Solution
Correct answer: B. Reserve requirement
1. Not every rupee taken in may be lent.
2. A share must be held back.
3. It is the reserve requirement.
_Source: OpenStax Introduction to Business, Chapter 15, Understanding Money and Financial Institutions._
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