Excess reserves are
A) desired reserves minus actual reserves.
B) required reserves minus actual reserves.
C) actual reserves minus desired reserves.
D) actual reserves minus required reserves.

Question

Quizplus · Accepted Answer

Excess reserves are the amount by which a bank's or financial institution's actual reserves exceed the required reserves. Required reserves are the minimum amount of reserves a bank is mandated to hold by regulation, and actual reserves are the total reserves held. Therefore, excess reserves are calculated as actual reserves minus required reserves.

Excess Reserves Are