Minimum cash reserves fixed by law constitutes _____________.

a percentage of aggregate deposits of the bank

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a percentage of aggregate loans advances of the bank

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a percentage of capital and reserves of the bank

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a percentage of the reserve capital

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Solution

The correct option is B a percentage of aggregate loans advances of the bank
Minimum cash reserves is the reserve requirement which is a central bank regulation that sets the minimum amount of reserves that must be held by a commercial bank in order to advance loans to the public.

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