Why are reserves listed in the assets column of a bank’s balance sheet?
What will be an ideal response?
Reserves are a claim on the Federal Reserves assets, since the Federal Reserve is the bank that holds the funds. This works much like check able deposits for depositors at a bank, which are a claim against the bank’s assets. In the way that check able deposits are an asset for the depositor, reserves are an asset for a bank.
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Psychological factors that may influence the saving rate are ________ and ________.
A. capital gains; the real interest rate B. the desire to leave a bequest; capital gains C. self-control problems; the demonstration effect D. the real interest rate; the demonstration effect
Disintermediation resulted from
A) interest rate ceilings combined with inflation-driven increases in interest rates. B) elimination of Regulation Q (the regulation imposing interest rate ceilings on bank deposits). C) increases in federal income taxes. D) reserve requirements.
The nominal interest rate tells you
a. how fast the number of dollars in your bank account rises over time. b. how fast the purchasing power of your bank account rises over time. c. the number of dollars in your bank account today. d. the purchasing power of your bank account today.
The largest portion of any nation's current account is typically
A) imports and exports. B) gold sales. C) the sale of U.S. assets. D) foreign currency reserves.