Answer to Question #339204 in Microeconomics for Hlelo

Question

According to the classical cash reserve system,

which of the following statements is/are true

regarding banks in South Africa?

(a) They are required to hold a minimum cash

reserve of 2,5% of their deposits.

(b) The level of the repo rate influences the interest

rate at which the banks provide credit to

individuals.

(c) The SARB provides cash reserves through

accommodation policy to the banks experiencing

liquidity shortage.

O a. (b)

O b. (a)

O c. (a) and (b)

O d. (c)

O e. (a), (b) and (c)

Answer 1

d. (c)