3 years ago

Increasing the reserve requirement is a powerful _____ weapon that reduces the overall supply of money.

1 answer:

3 0

Increasing the reserve requirement is a powerful ANTI INFLATION weapon that reduces the overall supply of money.
In order to reduce the amount of money in an economy, the federal reserve can increase the reserve requirements of the commercial banks in the economy. This will reduce the amount of money that the banks can give out as loan and this will work to prevent inflation.

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