Multiple Choice
Why do banks avoid holding excess reserves?
A) The Fed levies a 10% penalty on any reserves held above the required level.
B) The Fed does not pay interest on reserves.
C) Savers are often reluctant to place their deposits with banks that hold excess reserves.
D) The Office of the Comptroller of the Currency monitors excess reserves more closely than any other bank asset.
Correct Answer:
Verified
Correct Answer:
Verified
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