1) A bank has $1 million in vault cash, $5 million in short term Treasury securities and $20 million in deposits at a Federal Reserve Bank.
The bank’s primary reserves are:
The bank’s secondary reserves are:
2) Identify the term or concept that fits each description.
A) The interest rate the Fed charges banks for short term loans.
B) The most powerful monetary policy tool.
C) The most used monetary policy tool.
D) The interest rate banks charge each other for short term emergency loans.
E) When the public choosing to keep money out of circulation.
F) Government agency that protects depositors from bank failures (up to a limit).
G) It is made up of the 7 Fed Governors as well as the 5 Federal Reserve Bank
Presidents (Fed. Reserve Bank of NY is always represented).