Banks usually hold substantial excess reserves to make sure that their reserves do not fall below...

  

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Banks usually hold substantial excess reserves to make sure that their reserves do not fall below what is required, because it is difficult for banks to acquire reserves on a short-term basis if they are short O True O False QUESTION 13 The time lag for monetary policy is typically OA the same as the time lag for fiscal policy OB. Jonger than OC. about the same as OD. shorter than QUESTION 14 Intorest rates ore basically the price of money or the cost of funds O True OFalse Banks usually hold substantial excess reserves to make sure that their reserves do not fall below what is required, because it is difficult for banks to acquire reserves on a short-term basis if they are short O True O False QUESTION 13 The time lag for monetary policy is typically OA the same as the time lag for fiscal policy OB. Jonger than OC. about the same as OD. shorter than QUESTION 14 Intorest rates ore basically the price of money or the cost of funds O True OFalse

Answer rating: 100% (QA)

ANSWER 1 TRUE Banks have little incentive to maintain excess reserves because cash earns no return and may even lose value over time due to inflation ... View the full answer