If bad weather slows the clearing of checks, there will be an increase in excess reserves.

Question

Quizplus · Accepted Answer

When bad weather slows the clearing of checks, banks that have deposited checks drawn on other banks will not have those checks debited from their reserve accounts as quickly. This delay in the clearing process means that the banks will temporarily have higher balances in their reserve accounts, leading to an increase in excess reserves.

If Bad Weather Slows the Clearing of Checks, There Will