Another method that may be employed by banks to lower required reserves is to
A)transfer deposits to another domestic bank on Friday and transfer them back on the following Monday.
B)sweep demand deposits into higher interest-bearing accounts on Friday with a return sweep the following Monday.
C)rely more heavily on zero explicit interest-rate deposits.
D)delay posting deposits made on Friday until the following Monday.

Question

Quizplus · Accepted Answer

Sweeping demand deposits into higher interest-bearing accounts on Friday and then returning them on Monday allows the bank to temporarily reduce its required reserves while still being able to meet withdrawal demands from customers. This method is known as "sweeping" and is commonly used by banks to manage their reserve requirements. The other options (A, C, and D) do not address reserve requirements or do not provide a viable solution for reducing them.

Another Method That May Be Employed by Banks to Lower