What is the significance of legal tender?

Answer:

If money is legal tender, then it has to be accepted as a payment for ______________, otherwise debt is not collectible.

What are the bank's assets?

Answer:

The bank's assets are reserves, ______________, and securities.

How does an increase or decrease in the reserve ratio affect required reserves?

Answer:

If the reserve ratio increases, the bank has to set aside a larger percentage of its ______________ as required reserves. If the reserve ratio decreases, the bank has to set aside a smaller percentage of its deposits as required reserves.