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Hitman42 [59]
2 years ago
5

Through which tool does the federal reserve affect money available for banks to loan? discount rate money multiplier open-market

operations reserve requirement
Business
1 answer:
erastovalidia [21]2 years ago
4 0

The <em>federal reserve </em>affects money available for banks to loan by using the<u> reserve requirement</u> tool.

<h3>What is the reserve requirement in monetary policy? </h3>

Reserve requirement is said as the set-aside funds by the commercial banks that they utilize for meeting their liabilities and instant withdrawal from customers.

Therefore, when Fed increases the rate of <em>reserve requirement</em> then banks need to hold the <u>large amount </u>which reduces their ability to loan more funds. It ultimately reduces the money supply and <em>vice-versa</em>.

Learn more about monetary policy here:

brainly.com/question/13926715

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