If the reserve requirement is constant,it is impossible for a bank's excess reserves to fall if its total reserves have not fallen.

Question

Quizplus · Accepted Answer

Excess reserves are the amount of reserves a bank holds over and above the required reserve ratio. Therefore, if the reserve requirement is constant, the required reserves will remain the same and excess reserves will only change if total reserves change. If total reserves have not fallen, then by definition excess reserves have not fallen either.

If the Reserve Requirement Is Constant,it Is Impossible for a Bank's