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Since the Federal Reserve Banks are not operated for profit, profit considerations have no effect on the amount of credit they extend. With that said, the amount of credit extended is determined primarily by the monetary policy being pursued in the public interest. These monetary policies will either increase or decrease the availability of bank reserves, and thus ultimately affect the amount of credit that can be extended at any particular point in time.

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Q: What method is used by Federal Reserve Banks to determine the amount of credit they extend?
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