Asked by Morghan Graper on Apr 24, 2024
Verified
When actual reserves = required reserves,excess reserves = _____;when required reserves are greater than actual reserves,excess reserves are _____.
Actual Reserves
The sum of money a bank holds in its vault or with the central bank, ready to satisfy withdrawal requests or comply with regulatory obligations.
Required Reserves
The minimum amount of funds that a bank must hold in reserve against deposits, as mandated by monetary authorities.
Excess Reserves
The reserves that banks hold over and above the legally mandated minimum to meet withdrawal demands.
- Gain an understanding of how banks operate, specifically their need for reserve holdings.
Verified Answer
Learning Objectives
- Gain an understanding of how banks operate, specifically their need for reserve holdings.
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