If actual reserves exceed required reserves, the difference is referred to as:
A) Spread income.
B) Secondary reserves.
C) Excess reserves.
D) Total reserves.
E) None of the above.

Question

Quizplus · Accepted Answer

Excess reserves are the amount by which actual reserves exceed required reserves. This is the capital that banks can use for lending or investment purposes beyond what is required to be held as a reserve against deposits.

If Actual Reserves Exceed Required Reserves, the Difference Is Referred