The primary purpose of the legal reserve requirement is toa. Prevent banks from hoarding too much vault cash.b. Provide a means

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The primary purpose of the legal reserve requirement is toa. Prevent banks from hoarding too much vault cash.b. Provide a means

by which the monetary authorities can influence the lending ability of commercial banks.c. Prevent commercial banks from earning excess profits.d. Provide a dependable source of interest income for commercial banks.

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1 answer:

oee [108] · Answer 1 · 2022-03-05T19:52:14+03:00

Answer: The correct answer is choice b.

Explanation: The primary purpose of the legal reserve requirement is to provide a means by which the monetary authorities can influence the lending ability of commercial banks. Basically, it is the Federal Reserve’s way of controlling the money supply.