If a bank has zero excess reserves and one of its creditworthy customers applies for a loan,the bank may be able to grant the loan if it can
A) apply some of its loan repayments to obtain the funds for the new loan.
B) obtain extra funds in the federal funds market.
C) obtain extra funds by borrowing from the Fed.
D) any of the above
E) b or c

Question

Quizplus · Accepted Answer

Banks can grant a loan if they can apply loan repayments to fund the new loan, obtain extra funds in the federal funds market, or borrow from the Federal Reserve.

If a Bank Has Zero Excess Reserves and One of Its