Banks try to keep their excess reserves at a maximum in order to maximize profits.

Name: Banks try to keep their excess reserves at a maximum in order to maximize profits.
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Question

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Banks do not aim to keep excess reserves at a maximum as it earns them no interest. Instead, they aim to minimize excess reserves while meeting reserve requirements in order to lend out and earn interest on their funds. Thus, maximizing profits.

Banks Try to Keep Their Excess Reserves at a Maximum