Bank managers lend the excess reserves created when new deposits come in because they want to a. create new money in the economy. b. earn a profit. c. deplete required reserves. d. deplete desired reserves.
Bank managers lend the excess reserves created when new deposits come in because they want to a. create new money in the economy. b. earn a profit. c. deplete required reserves. d. deplete desired reserves.
Chapter25: Money, Banking, And The Federal Reserve System
Section: Chapter Questions
Problem 7P
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Question
Bank managers lend the excess reserves created when new deposits come in because they want to
a. create new money in the economy.
b. earn a profit.
c. deplete required reserves.
d. deplete desired reserves.
Expert Solution
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Step 1
Excess Reserves are the difference between actual reserves and desired reserves.
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