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A bank's reserves are classified on its balance sheet as:
AIts assets
BLiabilities
CIts net worth
DIts revenue
Answer & Solution
Correct answer: A. Its assets
1. Balance sheet placement follows who owes whom.
2. A balance sheet is an accounting tool that lists assets and liabilities.
3. For a bank, the assets are the financial instruments the bank is holding.
4. Its reserves are exactly such an instrument.
5. Loans made by the bank are assets for the same reason.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 13 'Money and Banking'_
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