Which of the following is the result of using "sweep accounts" in which high reserve ratio demand deposits are "swept" out of customers' accounts on Friday into higher interest-bearing savings accounts?
A)Increased reserve requirements for the bank.
B)Higher average balances in a DI's demand deposit.
C)Lower required reserve holdings at the Federal Reserve.
D)Lower interest burden for the bank.
E)None of the options.

Question

Quizplus · Accepted Answer

Sweep accounts allow banks to lower their required reserve holdings at the Federal Reserve by moving funds from demand deposits, which have reserve requirements, to savings accounts, which often have lower or no reserve requirements. This process reduces the amount of non-interest-bearing reserves a bank must hold.

Which of the Following Is the Result of Using "Sweep