Within the European Central Bank, Banks with Excess Reserves

question 61

Multiple Choice

Within the European Central Bank, banks with excess reserves:

• A)Can deposit them with the ECB and earn an interest rate 100 basis points below the target refinancing rate
• B)Earn no interest on excess reserves, similar to the system in the U.S.
• C)Must deposit the excess with the ECB's Deposit Facility
• D)None of the above answers is correct; there are no required reserves for the ECB and so therefore no excess reserves

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Definitions:

Spiritual Forces

Entities or energies believed to be beyond the physical world, often associated with religious or metaphysical beliefs.

Objectivity

The quality of being unbiased, unprejudiced, and impartial; dealing with facts without allowing personal feelings to influence them.

Bias

A tendency to lean in a certain direction, either in favor of or against a particular thing, often in a way that is considered to be unfair.

Physical World

The aspect of the universe that is understood through physical phenomena, including matter and energy, as opposed to the abstract or spiritual realm.