If banks do not have enough reserves to satisfy the reserve requirement,they can borrow additional reserves in the federal funds market.
The federal funds market is a market where banks can borrow overnight from other banks to maintain the required minimum level of reserves.

Question

Quizplus · Accepted Answer

This statement is true. Banks can borrow additional reserves in the federal funds market if they don't have enough reserves to meet the reserve requirement. The federal funds market is a market where banks can borrow overnight from other banks.

If Banks Do Not Have Enough Reserves to Satisfy the Reserve