Bank reserves refer to the cash balances held by banks to meet immediate withdrawal demands by customers or to make payments on their behalf. These reserves are a crucial part of the banking system's liquidity management. Options A, B, and D include components that are not considered part of the bank's reserves, such as customer deposits or financial assets lent to borrowers.

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Bank Reserves Are

Question 23

Multiple Choice

Bank reserves are:

A) currency and customer chequing deposits in the banks.
B) currency, customer chequing and savings deposits in the banks.
C) cash balances held by the banks to meet withdrawals by customers or payments to customers.
D) financial assets held by the banks obtained from savers and lent to borrowers.

Correct Answer: