will discourage aggregate
demand.
Monetary Policy
The three tools of the Federal Reserve are open market operations, discount rate, and reserve requirement.
The Federal Reserve Board can affect the economy by increasing or decreasing the money supply.
Increasing the reserve requirement for banks will make less money available to borrowers and thus slow the economy's growth.
19%
Monetary Policy
The three tools of the Federal Reserve are open market operations, discount rate, and reserve requirement.
The Federal Reserve Board can affect the economy by increasing or decreasing the money supply.
It protects public deposits.
Increasing the reserve requirement for banks will make less money available to borrowers and thus slow the economy's growth.
Less money in the economy.
Reserve requirement
the percentage of a bank's total deposits that must be kept in its possession
Money Multiplier is inverse of Reserve Requirement. That is, m = 1/R
reserve ratio
Reserve requirement.
excess reserves