For a bank to make further loans to the public, its excess reserves must be greater than its legal reserves.

Name: For a bank to make further loans to the public, its excess reserves must be greater than its legal reserves.
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Question

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A bank can make further loans as long as it has excess reserves; it does not need excess reserves to be greater than its legal reserves. Excess reserves are the amount by which actual reserves exceed the required legal reserves.

For a Bank to Make Further Loans to the Public