A bank's reserves are
A) the minimum value of assets it must have.
B) the amount of gold it is required to have as reserves against loans.
C) the value of federal securities it is required to have as reserves against loans.
D) deposits that banks have accepted from customers but have not loaned out.

Question

Quizplus · Accepted Answer

A bank's reserves refer to the amount of money that a bank is holding in cash or deposits with the central bank, which can be used to meet its obligations, such as withdrawals by customers or cashing of checks. These deposits have not been loaned out to customers and are therefore considered as reserves. Options A, B, and C are not correct as they do not accurately describe a bank's reserves.

A Bank's Reserves Are