A commercial bank can safely lend out its

Question

Quizplus · Accepted Answer

Excess reserves are the amount of reserves that a bank holds above the required reserves set by the Federal Reserve. These excess reserves can be used by the bank to make loans, which allows for economic growth and earning interest for the bank. Lending out total reserves or required reserves can lead to a bank not having enough funds to meet withdrawal demands from its depositors. Demand deposits are funds held in checking accounts by depositors, which banks are required to hold in reserves but cannot lend out.

A Commercial Bank Can Safely Lend Out Its