When a chartered bank has "excess reserves":
A)it is in a position to make additional loans.
B)its actual reserves are less than its desired reserves.
C)it is charging too high an interest rate on its loans.
D)its reserves exceed its assets.

Question

Quizplus · Accepted Answer

Excess reserves refer to the amount of funds held in reserve by a chartered bank that are above the required reserve ratio. When a bank has excess reserves, it has the ability to make additional loans, which can stimulate economic activity.

When a Chartered Bank Has "Excess Reserves