Excess Reserve

6 important questions on Excess Reserve

When did excess reserves peak?

They peaked in 2014 at over $2.5 trillion, 15% of GDP.

What were excess reserves by late 2019?

By late 2019, excess reserves were $1.3 trillion.

How did excess reserves change during COVID-19?

They increased again during the COVID-19 economic fallout.
  • Higher grades + faster learning
  • Never study anything twice
  • 100% sure, 100% understanding
Discover Study Smart

Why do excess reserves weaken traditional tools?

Banks with large cushions of reserves do not need to lend more.

What happens when reserves are added through open-market operations?

It can lead to more lending and increase money supply.

What might occur even if the Fed changes the supply of reserves?

The money supply may not change if banks do not lend more.

The question on the page originate from the summary of the following study material:

  • A unique study and practice tool
  • Never study anything twice again
  • Get the grades you hope for
  • 100% sure, 100% understanding
Remember faster, study better. Scientifically proven.
Trustpilot Logo