In an attempt to bring lenders and borrowers together following the financial crisis of 2008,the Federal Reserve made a large amount of new funds available to financial markets.Any of these new funds that were obtained by banks but were not loaned out would be classified as ________ of the banks.

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Quizplus · Accepted Answer

Excess reserves refer to any funds that a bank retains after meeting the required reserve ratio set by the Federal Reserve. In this scenario, the Federal Reserve made a large amount of new funds available to financial markets, and if banks obtained these funds but did not lend them out, then they would be classified as excess reserves. Required reserves refer to the minimum amount of funds that banks must hold in reserve, while deposits and liabilities are broader financial terms that may not necessarily apply to this specific scenario.

In an Attempt to Bring Lenders and Borrowers Together Following