If banks receive a greater amount of reserves and do not hold all of these reserves as excess reserves,the money supply expands.

Question

Quizplus · Accepted Answer

If banks receive more reserves, they can increase their lending and create more deposits, which will expand the money supply. However, if they hold all or part of these reserves as excess reserves, the money supply will not expand to the same extent.

If Banks Receive a Greater Amount of Reserves and Do