Excess reserves are the
A)same as the required reserves.
B)amount of reserves the Fed requires banks to hold.
C)amount of reserves held over what is desired.
D)amount of reserves a bank holds at the Fed.
E)amount of reserves banks keep in their vaults.

Question

Quizplus · Accepted Answer

Excess reserves are the amount of reserves held by a bank over and above the required reserves. Required reserves are the amount of funds that banks are required to hold in reserve against deposits by the central bank. Excess reserves can be loaned out or invested, allowing the bank to earn a profit on the unused reserves.

Excess Reserves Are the