The difference between actual and required reserves is known as

Question

Quizplus · Accepted Answer

Excess reserves are the difference between actual reserves held by a bank and the required reserves they need to hold. It represents the additional amount of money that a bank can potentially lend out, invest or use in other profitable ways. A and B are not correct as they refer to the ratio or percentage of reserves required to be held by the bank. C is not a commonly used term for this concept.

The Difference Between Actual and Required Reserves Is Known as