The demand curve for these entities becomes nearly horizontal near the equilibrium of the floor model, unlike in the corridor model. The demand curve for these entities is a downward-sloping logistic curve with bounds of i-sub-r and i-sub-b, which intersects their vertical supply curve. A simple expression for the money multiplier is the reciprocal of a ratio named for these entities, whose excess sometimes has a negative interest rate to encourage lending. (*) Open market operations traditionally change the quantity of these entities, which is often graphed against the interest rate. A minimum requirement for the size of these entities, often expressed as a percentage of liabilities, forms a system named for their “fractional” variety. For 10 points, name these deposits made by banks to the central bank. ■END■
ANSWER: bank reserves [accept cash reserves; prompt on descriptions such as money held by banks or cash in banks; do not accept or prompt on “The Federal Reserve” or “The Fed”]
<Benjamin McAvoy-Bickford, Social Science>
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