When a bank's excess reserves are zero:
A)its required reserves exceed its legal reserves.
B)its liabilities exceed its assets.
C)its liabilities must be lower than its assets.
D)its required reserves equal its legal reserves.
E)it cannot meet its reserve requirement.

Question

Quizplus · Accepted Answer

Excess reserves are the reserves held by a bank in excess of its required reserves. When the excess reserves are zero, it means that the bank's required reserves equal its legal reserves.

When a Bank's Excess Reserves Are Zero