Deposits Are an Asset for the Bank Because the Bank
Deposits are an asset for the bank because the bank can use the deposits to generate a profit.
Open market operations refer to the buying or selling of bonds by the central bank.
The reserve ratio can be larger or smaller than the required reserve ratio.
If the Fed's actions cause a bank's reserves to increase, we know the bank will have an incentive to convert the new reserves into loans and bonds because
A) of government regulation.
B) reserves are taxed by the federal government.
C) of moral suasion.
D) reserves don't earn interest.
E) the Fed will take the reserves back if they are not used.