Bank reserves are
A) currency and customer chequing deposits.
B) currency and customer chequing and savings deposits.
C) any asset used to purchase goods and services.
D) financial assets obtained from savers and lent to borrowers.
E) cash and similar assets held to meet depositor withdrawals or payments.

Question

Quizplus · Accepted Answer

Bank reserves are cash and similar assets held by the bank to meet depositor withdrawals or payments. This includes physical currency, deposits at the central bank, and vault cash. Option A and B are incorrect as they do not include all the assets considered as bank reserves. Option C is incorrect as it defines a broader concept of assets used to purchase goods and services. Option D describes the process of banking but not the reserves held by banks.

Bank Reserves Are