Question

Banks' holding of deposits in accounts with the Fed, plus currency that is physically held in banks are called A) the monetary base. B) government securities. C) open market operations. D) reserves.

Answer 1

The answer is D.

Step-by-step explanation:

Fed is the Central Bank of United States of America. Commercial banks have statutory deposits in their respective accounts with fed. Usually these deposit with Fed is mandatory and it is usually set by Fed

Also commercial banks have currency in their vault in their respective branches for withdrawals from their customers.

These two are called reserves.