If there were an increase in the number of bank failures, we should expect the amount of excess reserves in the banking system to:
A. Decrease.
B. Increase.
C. Not change.
D. Decrease since failing banks lost theirs.
Answer:B
If there were an increase in the number of bank failures, we should expect the amount of excess reserves in the banking system to:
A. Decrease. B. Increase. C. Not change. D. Decrease since failing banks lost theirs.