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Basic Question 4 of 13
The cash in a bank's vault plus its deposits at Federal Reserve banks is ______.
B. assets
C. reserves
A. M1
B. assets
C. reserves
User Contributed Comments 5
| User | Comment |
|---|---|
| indrasenareddy | why is it not B. Can the reserves of the Bank - assets ? |
| 2014 | Why not B as answer as it specifies cash in bank vault and "its" deposits with federal reserve bank. By specifying its it implies reserve on this cash is already deposited with fed |
| Inaganti6 | Reddapppaaaaaa |
| ibrahim18 | Cash in the vault is depositor's money. This is a liability to the bank and not an asset. Thus, the answer cannot be B. It's not A either. |
| xp_acctant | @Ibrahim18: deposit is a liability while cash is an asset to the bank. |
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Learning Outcome Statements
describe tools used to implement monetary policy tools and the monetary transmission mechanism, and explain the relationships between monetary policy and economic growth, inflation, interest, and exchange rates
CFA® 2024 Level I Curriculum, Volume 1, Module 4.