The bank reserve equation is the
A) assets and liabilities of the entire banking system.
B) tally sheet for sources and uses of reserves.
C) M1 multiplier.
D) Federal Reserve's method of determining how many government securities to purchase.

Question

Quizplus · Accepted Answer

The bank reserve equation is a tally sheet for sources and uses of reserves. It shows the amount of reserves a bank holds, as well as its required reserves and excess reserves. It is used by banks to manage their reserves and ensure that they meet the reserve requirements set by the Federal Reserve.

The Bank Reserve Equation Is the