Banks Try to Keep Their Level of Excess Reserves Low

question 143

Multiple Choice

Banks try to keep their level of excess reserves low because

• A)the Fed charges a penalty for holdings of excess reserves.
• B)they are concerned that the money multiplier will become too large.
• C)they wish to maximize profits.
• D)bank regulators levy fines on the amount of excess reserves.

---

Definitions:

Well-being

A state of being comfortable, healthy, or happy, often considered holistically including physical, mental, and social aspects.

Political Causes

Advocacy or movements aimed at influencing political policies or systems.

Corporations

Legal entities established by shareholders with the purpose of operating for profit, recognized as separate from their owners with distinct rights and liabilities.

Unlimited Amounts

Refers to a quantity without any limit or restriction, allowing for an indefinite expansion or supply.