For a variety of reasons, a bank sometimes will hold more reserves than is legally required. These reserves are known as excess reserves. How does holding excess reserves affect the money supply? Choose one:
(A) The money supply will increase as banks loan out more money.
(B) The money supply will increase as banks hold more vault cash.
(C) The money supply will increase as a bank's vault cash falls.
(D) The money supply will decrease as banks loan out less money.
(E) There is no impact. The level of deposits and loans will be unaffected.
+1
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “For a variety of reasons, a bank sometimes will hold more reserves than is legally required. These reserves are known as excess reserves. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Home » Business » For a variety of reasons, a bank sometimes will hold more reserves than is legally required. These reserves are known as excess reserves.