Multiple Choice
Which of the following statements is most correct?
A) Bank reserves are not affected by transactions involving the Treasury.
B) Derivative deposits occur when reserves created from primary deposits are made available through bank loans to borrowers who leave them on deposit in order to write checks against the funds.
C) Total bank reserves in the banking system consist of bank's member bank deposits held in Federal Reserve Banks, plus non-member banks vault cash.
D) Federal Reserve notes have been increasingly backed by gold certificates and eligible paper in recent years.
Correct Answer:
Verified
Correct Answer:
Verified
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