Reserves = Deposits at the Fed + ( ) = ( ) + Excess reserves

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Reserves = Deposits at the Fed + ( ) = ( ) + Excess reserves

business economics

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Answer 1

Answer #1

Reserves in federal reserve Bank is the saved money which can be used for further requirement needs

For example strengthen the economy or supporting the fellow banks

If we talk in the formula then reserve is equal to the required reserves + the excess reserves.

Required reserves meaning that the bank hold for emergency need or withdrawals

Excess reserves are the reserve requirement that a bank holds for fighting the situations like high interest rates, loan demands etc

The Formula is also equal to the sum of deposit Plus vault cash

Vault cash includes paper currency, metals and gold coins

Deposits are the money that is being put by the consumers in the bank for future use and earning interest

Reserves & Deposit in t[ Vault the FED I Cash Reseries - I fequired t excess Reserves Reserves

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Answer 2

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