The excess reserves of a bank determine the:
A) amount in loans the bank can make.
B) interest rate the bank pays on savings accounts.
C) funds that must be maintained in the bank's vault cash to back its loans.
D) all of the above.

Question

Quizplus · Accepted Answer

Excess reserves are the funds a bank has beyond its required reserves, which can be used to make loans. The amount of these excess reserves directly influences the amount in loans a bank can extend to its customers.

The Excess Reserves of a Bank Determine The