Question: Banks hold 'Excess Reserves' when _________. a) they do not make as many loans as they could, based on the required reserve ratio b) they

Banks hold 'Excess Reserves' when _________.

a) they do not make as many loans as they could, based on the required reserve ratio b) they make more loans than is safe (financially prudent)

c) they hold less cash on hand than is required by the Federal Reserve

d) the Fed requires banks to make additional loans, to shift aggregate demand

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