Banking Reserves Quiz
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Questions and Answers

What are reserves for the banks and the Fed, respectively?

  • Assets for both the banks and the Fed
  • Liabilities for the banks, assets for the Fed
  • Liabilities for both the banks and the Fed
  • Assets for the banks, liabilities for the Fed (correct)

    • What is the term for the additional reserves that banks choose to hold?

  • Optional reserves
  • Voluntary reserves
  • Excess reserves (correct)
  • Supplementary reserves

    • What does the Fed do when it takes actions to increase reserves?

  • Increases liquidity in the banking system (correct)
  • Increases the reserve requirements for banks
  • Has no impact on liquidity in the banking system
  • Decreases liquidity in the banking system

    • What is the term for the deposits that the Fed requires banks to hold as reserves?

    <p>Required reserves</p> Signup and view all the answers

    What is the term for the currency physically held by banks?

    <p>Vault cash</p> Signup and view all the answers

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