A bank may lend an amount equal to its

Question

Quizplus · Accepted Answer

A bank may lend an amount equal to its excess reserves, which is the amount of reserves it holds above the required reserves set by the Federal Reserve. Banks cannot lend out their required reserves or total reserves as those are necessary to meet customer demand and reserve requirements. Total assets represent the total value of a bank's assets, including loans and investments, and do not necessarily indicate how much a bank can lend.

A Bank May Lend an Amount Equal to Its