To maximize its profit,a bank will:A) minimize the number transactions it engages in.B) maximize required reserves.C) minimize excess reserves.D) maximize excess reserves.E) minimize required reserves.

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Alfredo Dominguez · Accepted Answer

Final Answer : C, Explanation :  Minimizing excess reserves is a strategy banks use to maximize profit. By keeping excess reserves low, banks can lend out more money, earning interest on those loans, which increases their profits. Holding excess reserves incurs an opportunity cost as those funds could be earning interest if lent out.

To maximize its profit,a bank will:

A) minimize the number transactions it engages in.
B) maximize required reserves.
C) minimize excess reserves.
D) maximize excess reserves.
E) minimize required reserves.

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