When banks borrow from and lend reserves to each other,they are participating in the _____ market.

Question

Quizplus · Accepted Answer

When banks borrow from and lend reserves to each other, it is typically done in the overnight market. This allows banks to meet their reserve requirements and engage in transactions with other banks without significantly impacting their balance sheets or liquidity positions. The other options listed (subprime mortgage, long-term capital, and money) do not accurately describe this type of market activity.

When Banks Borrow from and Lend Reserves to Each Other,they