B. Reserves are: A assets of the central bank and liabilities of the commercial
ID: 2794185 • Letter: B
Question
B. Reserves are: A assets of the central bank and liabilities of the commercial bank. B. assets of the commercial banks and liabilities of the central bank. C. liabilities of the commercial and central banks. D. assets and liabilities for the central bank. 9 Vault cash is: A equal to the total amount of reserves and is an asset of the central bank. B. not reserves but is a liability of the central bank. C. a part of reserves and an asset of commercial banks. D. not reserves but is an asset of central banks. The monetary base is the sum of: A reserves and M2 B. M1 and reserves. C. currency in the hands of the public, reserves and M1. D. currency in the hands of the public and reserves in the banking system. 10.Explanation / Answer
Answer 8: B. Assets of the commercial bank and liabilities of the central bank.
As the commercial bank deposits the reserve amount with central bank they are assets of the commercial bank but cannot be used by them often and are liabilities of central bank as they need to give it back.
Answer 9. C. A part of reserves and an aseet of commecial banks.
Vault cash is are curreny deposited by commercial banks in the vaults of commercial bank.
Answer 10. D. currency in the hands of public and reserves in the banking system
The monetary base is the sum of currency in the hands of public and reserves in the banking system including central banks.
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