Business, 24.03.2020 00:32 ChessieGiacalone

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 hold more vault cash. B. The money supply will increase as banks loan out more money. C. There is no impact. The level of deposits and loans will be unaffected. D. The money supply will decrease as banks loan out less money. E. The money supply will increase as a bank’s vault cash falls.

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For a variety of reasons, a bank sometimes will hold more reserves than is legally required. These r...

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