Required reserves for a commercial bank
A) are only the money used by the bank tellers.
B) consist only of deposits at the Fed.
C) are only the reserves required to be held in the bankʹs vault.
D) are the reserves a bank is legally required to hold to back its deposits.

Question

Quizplus · Accepted Answer

Required reserves for a commercial bank are the reserves that a bank is legally required to hold to back its deposits. These reserves are held in accounts at the Federal Reserve or as vault cash.

Required Reserves for a Commercial Bank