Banks can make additional loans when required reserves are

Question

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Banks can create additional loans when their required reserves are less than their actual reserves. This is because required reserves are the minimum amount of reserves that banks must hold, while actual reserves are the total amount of reserves that banks have, which can include excess reserves. Excess reserves can be used to make additional loans, which can in turn create more deposits and further increase the money supply. If required reserves were greater than total reserves, the bank would not be able to make any additional loans, as it would not have enough reserves to meet the required amount. Choices C and D are incorrect as they are not directly related to the concept of required reserves in relation to making additional loans.

Banks Can Make Additional Loans When Required Reserves Are