Reserve requirements are highest for
A) transactions deposits.
B) bank borrowings from foreign branches.
C) federal funds.
D) business time deposits.

Question

Quizplus · Accepted Answer

Reserve requirements are highest for transactions deposits because they are the most liquid and stable source of funding for banks, and therefore require a higher level of reserves to ensure their safety and availability. Bank borrowings from foreign branches and federal funds are not subject to reserve requirements, while business time deposits have lower reserve requirements due to their lower liquidity and stability compared to transactions deposits.

Reserve Requirements Are Highest for