Bank West's Balance Sheet Assets Liabilities
Cash $500 Deposits $20 000
Deposits at Bank of Canada $700 Capital $1 000
Loans and Mortgages $19 800 $21 000
$21 000
TABLE 26-3
Refer to Table 26-3.What are the reserves held by Bank West?

Question

Quizplus · Accepted Answer

Reserves held by a bank include cash in its vaults (physical currency it holds) and deposits at the central bank (in this case, the Bank of Canada). Therefore, Bank West's reserves are $500 (cash) + $700 (deposits at Bank of Canada) = $1200.