Decreases the money supply
The increase in the discount rate will cause the money supply to reduce in growth
raising of interest rates
When the discount rate is high, banks keep more reserves on hand to avoid paying a lot to borrow from the Fed... Apex :)When the discount rate is high, banks keep more reserves on hand to avoid paying a lot to borrow from the Fed.
The Federal Reserve Board can affect the economy by increasing or decreasing the money supply.
"Explain how different monetary policies affect the money supply in the economy?"
The increase in the discount rate will cause the money supply to reduce in growth
raising of interest rates
When the discount rate is high, banks keep more reserves on hand to avoid paying a lot to borrow from the Fed... Apex :)When the discount rate is high, banks keep more reserves on hand to avoid paying a lot to borrow from the Fed.
The Federal Reserve Board can affect the economy by increasing or decreasing the money supply.
"Explain how different monetary policies affect the money supply in the economy?"
The most likely effect of the Federal Reserve lowering the discount rate on overnight loans would be an increase in the money supply. an increase in the money supply
Well, if by "the federal reserve", you mean the federal reserve bank, then there are two types of policies. These are expansionary and contractionary monetary policies. In times of recession, The FED uses expansionary policies such as increasing the money supply by buying bonds, lowering the discount rate, and lowering reserve requirements.In times of over expansion, The FED uses contractionary policies such as decreasing the money supply by selling bonds, raising the discount rate, and raising reserve requirements.
inflation
If the Fed raises the discount rate from five percent to ten percent, there would be less money supply. This is because it is a contractionary monetary policy.
Increase or decrease the money supply
An increase in the money supplyAn increase in the money supply
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