Which of the Following Statements Is Most Correct

question 37

Multiple Choice

Which of the following statements is most correct?

• A) Bank reserves are not affected by transactions involving the Treasury.
• B) Derivative deposits occur when reserves created from primary deposits are made available through bank loans to borrowers who leave them on deposit in order to write checks against the funds.
• C) Total bank reserves in the banking system consist of bank's member bank deposits held in Federal Reserve Banks, plus non-member banks vault cash.
• D) Federal Reserve notes have been increasingly backed by gold certificates and eligible paper in recent years.

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