Bank reserves equal:
A) gold kept in bank vaults.
B) gold kept at the central bank.
C) currency plus demand deposits.
D) deposits that banks have received but have not lent out.

Question

Quizplus · Accepted Answer

Bank reserves refer to the deposits that banks have received but have not lent out, which are kept as reserves to meet customer demand for withdrawals and other operational needs. Gold kept in bank vaults or at the central bank is not necessarily part of bank reserves, while currency and demand deposits are components of the broader money supply.

Bank Reserves Equal