The major assets and liabilities of a bank are:
A) checkable deposits and total reserves, respectively.
B) checkable deposits and gold, respectively.
C) total reserves and checkable deposits, respectively.
D) total reserves and excess reserves, respectively.
E) checkable deposits and excess reserves, respectively.

Question

Quizplus · Accepted Answer

Checkable deposits are a liability for banks, while total reserves are an asset. This is because banks are obligated to give their customers access to their checkable deposits upon demand, therefore it is a liability. On the other hand, total reserves are an asset because they represent the amount of money a bank holds to meet its obligations and ensure its stability.

The Major Assets and Liabilities of a Bank Are