Asked by
Jesani Caban
on Nov 11, 2024Verified
If a bank's reserves are exactly equal to the required amount of reserves,then it has no excess reserves.
Excess Reserves
The capital reserves held by banks over and above the minimum required by regulators, available for lending or investing.
Required Reserves
The minimum amount of reserves that a bank must hold, as mandated by the central bank, against its deposit liabilities.
- Apprehend the involvement of banking institutions in the generation of monetary supply.
- Understand the differences among excess reserves, required reserves, and total reserves.
Verified Answer
BC
Learning Objectives
- Apprehend the involvement of banking institutions in the generation of monetary supply.
- Understand the differences among excess reserves, required reserves, and total reserves.