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Banks are legally required to hold on to excess reserves.

A. True
B. False


Sagot :

Final answer:

Banks are legally required to hold excess reserves, especially during challenging economic times.


Explanation:

True. Banks are required to hold a minimum level of reserves, but they can also choose to hold excess reserves above the mandated limit. This can be beneficial during economic downturns when banks may be cautious about lending.


Learn more about Bank Reserves here:

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