In what ways can the Fed be subject to external pressure (Select all the apply from the options below) 1. The president can exercise control over the memebership of the Board of Governors and appoint a new chariman every four years 2. The Congress scrutinizes Fed's budgertary requests and can reduce the amounts requested if the Fed has fallen out of favour  3. The Congress can try to put pressure on the Fed and amend the Fed's charter  4. The Fed is subject to influence from different investors groups because it has to rely on external sources of funding

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Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.