Archives: Terms

Definition of Resolution Trust Corporation The Resolution Trust Corporation (RTC) was a temporary federal agency established in the late 1980s to deal with the Savings and Loan (S&L) crisis in the United States. The main objective of the RTC was to oversee the liquidation of the assets of insolvent thrift […]

Definition of Residual Variation Residual variation, sometimes known as residual error, represents the difference between observed values and the values predicted by a statistical model. In other words, it is the discrepancy that remains after a fitting model to a dataset, reflecting the variation that the model couldn’t explain. In […]

Definition of Residual Unemployment Residual unemployment refers to the portion of the unemployed population that remains without work due to structural factors, even when the overall economy is performing well. This type of unemployment is typically persistent and cannot be easily eliminated by standard economic policies aimed at boosting demand. […]

Definition of Residual Residual, in an economics context, refers to the remainder or leftover portion that is not accounted for by certain factors in a mathematical or statistical model. Essentially, it is the difference between the observed and predicted values in a model. Residuals play a critical role in econometrics […]

Definition of Marginal Utility Marginal Utility refers to the additional satisfaction or benefit received from consuming one more unit of a good or service. It is an essential concept in economics as it helps to explain how consumers make decisions based on their satisfaction levels from incremental consumption. In general, […]

Definition of Reserves Reserves refer to the portion of funds that banks or financial institutions hold back from lending out or investing. These are typically set aside to meet any sudden or unexpected financial needs, to comply with regulatory requirements, or to address potential risks. Reserves can be classified into […]

Definition of Reserve Tranche (IMF) The reserve tranche is a component of a country’s quota in the International Monetary Fund (IMF) that can be accessed without stringent conditions. In essence, it represents the portion of a member country’s quota that is readily available to them to meet balance of payments […]

Definition of Reserve Requirements Reserve requirements refer to the regulations set by central banks that determine the minimum amount of reserves that commercial banks must hold against their deposits. These reserves can be held as cash in the bank’s vault or as deposits with the central bank itself. The primary […]

Definition of Reserve Ratio The reserve ratio is a regulatory requirement placed on banks and other depository institutions. It dictates the minimum amount of reserves a bank must hold, expressed as a percentage of the bank’s deposit liabilities. Essentially, it is a tool used by central banks to control the […]

Definition of Reserve Currency A reserve currency is a foreign currency that is held in significant quantities by central banks and other major financial institutions as part of their foreign exchange reserves. This type of currency is used in international trade and investment because of its stability and acceptance worldwide. […]