The required reserves of a bank are:
A) held as deposits with the Federal Reserve System.
B) equal to its loans.
C) equal to its checkable deposits.
D) none of the above.

Question

Quizplus · Accepted Answer

Required reserves of a bank are held as deposits with the Federal Reserve System. This is a regulatory requirement that banks must adhere to in order to ensure stability in the financial system. Option B and C are incorrect as they are not related to required reserves.

The Required Reserves of a Bank Are