Reserve balances are so-called because Multiple Choice banks and thrifts must call the Fed and request they (the Fed) "reserve" a certain amount of money each day for them (the commercial banks and thrifts) to be able to cover their transactions. the Fed asks banks and thrifts to "reserve" any money lent out as loans in a special account called "reserve balances" until the end of the week when it can then be released. they are the funds that the Federal Reserve keeps on deposit for banks and thrifts to take care of ongoing commercial bank and thrift operations. none of the above