Cash held by a bank in its vault is a part of the bank's
A) reserves.
B) liabilities.
C) money supply.
D) net worth.

Question

Quizplus · Accepted Answer

Cash held by a bank in its vault is considered a part of the bank's reserves. This is because the cash is held in order to meet any withdrawals or other demands from customers, and is therefore considered a reserve against potential losses. Liabilities refer to the money that a bank owes to its depositors, while net worth refers to the value of the bank's assets minus its liabilities. The money supply refers to the overall amount of money in an economy, which includes cash held by individuals and businesses as well as deposits held in banks.

Cash Held by a Bank in Its Vault Is a Part