One of the Main Liabilities on the Fed's Balance Sheet

Multiple Choice

One of the main liabilities on the Fed's balance sheet is reserves. Which of the following is the best definition of that item?

A) Reserves represent foreign currencies held at the Fed.
B) Reserves are deposits that banks hold at the Fed.
C) Reserves represent gold and other precious metals held at the Fed.
D) Reserves represent loans that the Fed has made to other countries.
E) None of these is an appropriate definition.