Question

Why does the federal reserve require banks to keep a minimum deposit with a federal reserve bank?

A. To make sure that banks only issue the minimum number of travelers checks required by law

B. To make sure that banks are following the rules for how checks in online transactions are processed

C. To make sure that banks will always have enough money available to meet the demand for withdrawals

D. To make sure that banks are not processing money that is more than 5 years old

Answer 1

"C. To make sure that banks will always have enough money available to meet the demand for withdrawal" This way the money can circulate through the bank and the government.

Hope this helps!