Asked by Caden Coulson on Jun 29, 2024
Verified
A bank's reserves include its
A) vault cash and deposits with the Federal Reserve.
B) holdings of government bonds and corporate stocks.
C) checkable deposits and holdings of government bonds.
D) tellers who are ready and able to work if there is a strike by the regular tellers.
E) accounts receivable.
Vault Cash
Physical currency that banks and other depository institutions hold in their vaults, used to meet customer withdrawals and other immediate needs.
Federal Reserve
The central banking system of the United States, responsible for monetary policy, regulation of financial institutions, and maintaining financial system stability.
- Understand the influence of reserve requirements on the lending abilities of banks.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
A
Explanation :
A bank's reserves include the money it holds in its vault (vault cash) and the money it has on deposit with the Federal Reserve. These reserves are important because they enable the bank to meet withdrawal demands from its depositors and to make loans.
Learning Objectives
- Understand the influence of reserve requirements on the lending abilities of banks.