The part of a commercial bank's reserves that are larger than desired are called
A)additional reserves.
B)required reserves.
C)excess reserves.
D)nonrequired reserves.
E)unnecessary reserves.

Question

Quizplus · Accepted Answer

Excess reserves refer to the amount of reserves held by a commercial bank that exceed the required reserves set by the central bank. This can happen when a bank's deposit base shrinks or when it receives more deposits than expected. Banks can use these excess reserves to lend to other banks or invest in assets that generate income.

The Part of a Commercial Bank's Reserves That Are Larger