A bank's reserves are equal to:
A)deposits at the Fed.
B)cash held in bank branches and ATMs.
C)cash held in bank branches and ATMs plus deposits at the Fed.
D)saving deposits plus checkable deposits.

Question

Quizplus · Accepted Answer

A bank's reserves consist of the money it keeps on hand in its branches and ATMs and the money it deposits in its account at the Federal Reserve (also known as vault cash and required reserves, respectively). Therefore, choice C is the correct answer, as it includes both components of a bank's reserves. Choices A, B, and D do not include all components of a bank's reserves.

A Bank's Reserves Are Equal To