Question

eserve deposits are A. liabilities for both financial institutions and the Fed. B. assets for both financial institutions and the Fed. C. assets for financial​ institutions, but liabilities for the Fed. D. liabilities for financial​ institutions, but assets for the Fed.

Answer 1

Answer: Option C

Explanation: In simple words, reserve deposits refers to the amount of deposits that the american banks that deals with the public has placed with the federal bank of America.

Thus, the funds are actually owned by the banks but are deposited to the central bank.

Thus, we can conclude that the correct option is C.