The Federal Reserve's reserve requirement power includes the authority to

(a) determine which bank liabilities are subject to reserve requirements

(b) impose reserve requirements on mutual funds

(c) eliminate reserve requirements for small banks (i.e., those with deposits of $100 million or less)

(d) all of the above

The correct answer is: (a) determine which bank liabilities are subject to reserve requirements

Commercial banks have different types of liabilities. All these liabilities may, at one point, be required to have a certain amount of money in their reserve. The Federal Reserve sets this policy. In addition to regulating the amount of money in circulation, banks also use the Reserve Requirements in cases where there has been more than normal withdrawals that the bank cannot satisfy. The reserve requirement for most banks in the world is usually 10%, as it has been in the United States until the wake of the COVID-19 pandemic when it was lowered to 0%.