Question

MCO Exam
(6 of 50)
Q6
Which of the following
is not true of excess
reserves held by
commercial banks?
A) Bank statutorily hold them
B) They are determined by
clearing drain and currency drain
C) They are voluntarily held by
banks​

Answer 1

Answer:

option a and c is not ture

I think

Answer 2

Option B is the correct answer.

Excess reserves held by commercial banks are not determined by clearing drain and currency drain.

1. Excess reserves are determined by standard reserve requirements that are set by central bank of a country.
2. Currency drain is the currency that is pulled out from banking system into public circulation.
3. Clearing drain is losing of cash reserve in one bank and transferring it to another bank. This happens when customers write cheques.