A bank's reserves
A) are the sum of its excess and required reserves.
B) can be held as cash in its vault.
C) can be held as deposits with the Federal Reserve.
D) all of the above

Question

Quizplus · Accepted Answer

A bank's reserves include both its excess reserves (the amount of funds held in excess of the required reserve ratio) and its required reserves (the minimum amount of funds that must be held according to the reserve ratio set by the Federal Reserve). These reserves can be held as cash in the bank's vault, as well as deposits with the Federal Reserve. Therefore, the correct answer is D, all of the above.

A Bank's Reserves