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4 years ago

Suppose the reserve requirement is 10%.

Business

1 answer:

mestny [16]4 years ago

3 0

Answer:

B. more reserves, thus increasing the money multiplier and increasing the money supply.

In a fractional-reserve banking system, banks create money when they make loans. The more money they have available to make loans, the more money they create.

If the Fed reduces the reserve-requirements, banks will have more reserves available to loan out, increasing the money multiplier, and thus, the money supply.

A. rarely changes the reserve requirement and does not use the reserve requirement as a major monetary policy tool.

The Fed rarely uses this monetary policy tool because it is the most powerful one. Changing the reserve requirements effectively reduce or increase the money supply like no other monetary policy tool, therefore, the effects can be dramatic, and its use is a sign that all other tools have been exhausted (open-market operations, and discount window mainly).

Explanation:

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2 years ago

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Zolol [24]

Answer:

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Explanation:

Rewriting the sentences to eliminate the long strings of nouns

a) The Focus of the meeting was about the issue of bank interest rate deregulation

b) Following the recommendations of the government taskforce we are revising our job application evaluation procedures

c) The quality assurance program of the production department includes components like, employee training, supplier cooperation and computerized detection equipment

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