Banks can make loans up to an amount equal to their
A)total deposits.
B)total reserves.
C)required reserves.
D)excess reserves.
E)total government securities.

Question

Quizplus · Accepted Answer

Banks have the ability to make loans using their excess reserves. Excess reserves are the reserves held by banks that exceed the required amount determined by the Federal Reserve. Therefore, banks can make loans up to the amount of their excess reserves.

Banks Can Make Loans Up to an Amount Equal to Their