Question

Which of the following best describes the purpose of raising and lowering the

Answer 1

Answer: To manage the economy by increasing or decreasing the amount of loans being made.

Explanation:

next time put the choices

Answer 2

Answer:

It is used by Fed to manage the economy by increasing or decreasing the amount of loans being made

Explanation:

The Fed decides on required reserve ratio for the banks and other financial institutions; t can lower or raise it. Reserve ratio is the portion of all the money that bank are required  to sets aside and hold onto; this means they are not allowed to lend that out to borrowers. This is a technique that is used to control the supply of money in the economy. By decreasing this ratio, banks will have more money to lend out and vice versa.