Under the lagged reserve accounting system, the
A)reserve maintenance period is two days longer than the reserve computation period.
B)reserve maintenance period starts two days after the start of the reserve computation period.
C)reserve maintenance period does not begin until seventeen days after the end of the computation period.
D)reserve computation period starts on the same date as the reserve maintenance period.
E)reserve computation period is two days longer than the reserve maintenance period.

Question

Quizplus · Accepted Answer

Under the lagged reserve accounting system, the reserve maintenance period does not begin until seventeen days after the end of the computation period. This delay allows banks to calculate their required reserves based on their deposits and other liabilities from the computation period before they must actually maintain those reserves.

Under the Lagged Reserve Accounting System, the