Deposits of commercial banks at the Federal Reserve are called . A) bankers' acceptances B) time deposits C) repurchase agreements D) federal funds

D) Federal Funds

Explanation:

Commercial banks are required to maintain reserves with their regional federal banks. For this requirement they have to make regular timely deposits with federal bank.

These deposits constitute federal funds. The Fed utilizes these funds to regulate markets and meet the demand of other market borrowers. Reserve creation with Fed requirements are determined as per the amount of customer deposits each commercial bank gets.

Customers deposit their funds with commercial banks, a proportion of which is deposited by such banks with Federal reserve to meet their reserve requirements.

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