When Economists Say That Banks Must Hold a Percentage of Their

Multiple Choice

When economists say that banks must hold a percentage of their total deposits in reserve form,what does this mean?

A) It means that banks must hold a fraction of their customers' deposits either as bank deposits at the Federal Reserve,or as vault cash,or both.
B) It means that banks reserve the right to turn away customers a certain percentage of the time.
C) It means that the fraction of vault cash a bank has cannot be greater than the fraction of bank deposits (it has) at the Federal Reserve.
D) Essentially,it means that total reserves are greater than required reserves.
E) none of the above