Legal reserve requirements are changed (L.O2) a) very often b) on rare occasions c) never d) none of these

Legal reserve requirements are the amount of money that banks and other financial institutions are required to keep as a minimum reserve. These requirements are set by the Central Bank or government authorities to control the money supply and maintain the stability of the financial system.

Go through each answer choice and determine how frequently legal reserve requirements change. a) very often: Legal reserve requirements are not changed very often, as they are a form of monetary policy and major changes can affect the stability of the financial system. b) on rare occasions: This answer seems more reasonable. Reserve requirements may be altered during financial or economic crises to restore stability or encourage lending. Still, these changes are not done frequently or without significant consideration. c) never: This is incorrect because changes to reserve requirements have occurred in the past, and they may also be altered when necessary. d) none of these: This option can be discarded as it suggests that no choice is correct, but we have already established that option (b) seems appropriate.

Based on the evaluation of the options, we can conclude that the correct answer is (b) on rare occasions. Legal reserve requirements are changed infrequently and only when necessary to maintain financial stability or address economic issues.