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

Question

Quizplus · Accepted Answer

Excess reserves are defined as the difference between actual reserves held by a bank and the desired reserves that the bank would like to hold. Therefore, option D, which states "actual reserves minus desired reserves," correctly defines excess reserves.

Excess Reserves Are