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A to keep from lending too much money. B to be sure it can meet its customers demands. Economics Ms Harris Chapters 10 And Ppt Download 10 When banks hold excess reserves because they dont see. . The opportunity cost of excess reserves can be high. It will lead to a decrease in the money supply and an increase in interest rates which will ultimately slow down investment in the economy. 11 Which of the following are consequences of increasing the. Find step-by-step Economics solutions and your answer to the following textbook question. Excess reserves provide extra liquidity and safety for the banking system. A bank can only extend additional loans if it has excess reserves reserves in excess of the amount needed to meet regulatory requirements. Financial firms that carry excess reserves have an extra measure of safety in the event of sudden loan loss or significant cash withdrawals by. C to make check clea...
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