If a bank receives more checks deposited to the accounts it holds than checks drawn against its deposit accounts,the bank's legal reserves will tend to increase.

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When a bank receives more checks deposited to its accounts than checks drawn against its deposit accounts, the excess funds will increase the bank's deposits, which, in turn, will increase its legal reserves. Legal reserves are defined as the minimum amount of funds that a bank must hold in reserve against its deposit liabilities. Hence, when a bank's deposits increase, its legal reserves also tend to increase.

If a Bank Receives More Checks Deposited to the Accounts