Why can banks continue to hold reserves that are only a fraction of the demand and saving

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Why can banks continue to hold reserves that are only a fraction of the demand and saving deposits of their customers? Is your money safe in a bank?

Why or why not?

*6. Suppose you withdraw $100 from your checking account. How does this transaction affect

(a) the supply of money,

(b) the reserves of your bank, and

(c) the excess reserves of your bank?

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Macroeconomics Private And Public Choice

ISBN: 9780538754286

13th Edition

Authors: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

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Question Posted: Oct 25, 2024 05:00 AM

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Why can banks continue to hold reserves that are only a fraction of the demand and saving

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Macroeconomics Private And Public Choice

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