The assets of a commercial bank may include all of the following except:   Question 28 options:   a)  reserve balances it holds at a Federal Reserve Bank.   b)  federal funds borrowed from another bank.   c)  loans a bank makes to its business customers.

Q: why

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer one question at a ti...

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A: "Correct option a- decrease GDP."

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.