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goldfiish [28.3K]
1 year ago
15

What happens when a bank is required to hold more money in reserve?

Business
1 answer:
valina [46]1 year ago
8 0

The thing that happens when a bank is required to hold more money in reserve is It has less money for loans.

<h3>What happens when reserve requirements are increased?</h3>

Banks are known to often hold a lot of reserves if reserve requirements are increased.

This is because it is one that they can be able to use if they want to loan out less of each dollar that is said to be deposited. By raising the the reserve ratio, and also lowers the money multiplier, and lowering the money supply.

Therefore, The thing that happens when a bank is required to hold more money in reserve is It has less money for loans.

Learn more about reserve  from

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5 0
2 years ago
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