10) The amount of deposits that banks must hold in reserve is A) total reserves.
ID: 1109839 • Letter: 1
Question
10) The amount of deposits that banks must hold in reserve is
A) total reserves. B) required reserves. C) excess reserves. D) vault cash.
11) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and nine million dollars in excess reserves. Given this information, we can say First National Bank has ________ million dollars in required reserves.
A) one B) two C) eight D) ten
12) When banks borrow money from the Federal Reserve, these funds are called
A) Treasury funds. B) discount loans.
C) federal loans. D) federal funds.
Explanation / Answer
(10) (B)
Required reserves is the amount of reserves that Banks are required to hold as per Fed's mandate.
(11) (C)
Banks keep their required reserves as deposit with Fed.
(12) (B)
Discount loan is the loan extended by Fed to commercial bank, and the interest thus charged by Fed is known as the Discount rate.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.