Can a 2016 iMac be used as a monitor for Mac mini?

There is no 2016 model iMac. It is either a 2015 or a 2017 model iMac.

see > Identify your iMac model - Apple Support

No sorry, both that iMac and a new Mac mini do not support the old Target Display Mode feature.

see > Use your iMac as a display with target display mode - Apple Support

If you have or purchase a new Mac mini, then you will also need an external Display.

see > Connect a display to Mac mini - Apple Support

Not if you are thinking of using Target Display Mode. Target Display Mode went away in Late 2014 when the first 27" 5K Retina iMac came out. It never returned.

On top of that, recent Macs don't support using ANY iMac as a Target Display.