Which of the following assets can a commercial bank count as reserves?
A) its holdings of U.S. Treasury bills
B) its vault cash and deposits with the Fed
C) its outstanding loans
D) the savings accounts of its depositors

Question

Quizplus · Accepted Answer

Reserves are the funds that a commercial bank is required to hold in cash or deposits with the Fed. Therefore, only its vault cash and deposits with the Fed can be counted as reserves. U.S. Treasury bills, outstanding loans, and savings accounts of depositors are not considered reserves.

Which of the Following Assets Can a Commercial Bank Count