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To manage the economy by increasing or decreasing the amount of loans being made
Increase or decrease the money supply
To manage the economy by increasing or decreasing the amount of loans being made
When the required reserve ratio is lowered, banks can loan out more money.
When the required reserve ratio is high, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
To manage the economy by increasing or decreasing the amount of loans being made
Increase or decrease the money supply
To manage the economy by increasing or decreasing the amount of loans being made
By the lowering of the required reserve-level rate, banks can increase the proportion of funds they are able to lend to customers.
To manage the economy by increasing or decreasing the amount of loans being made
When the required reserve ratio is lowered, banks can loan out more money.
When the required reserve ratio is raised, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
When the required reserve ratio is high, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
If they lower the ratio, banks do not have to hold as much cash (which gains no interest), the banks will attempt to loan this money out and make money, this can stimulate investment. Increase or decrease in the money supply (APEX)
When the required reserve ratio is raised, banks must loan out a smaller portion of their reserves, resulting in fewer loans.
When the required reserve ratio is high, must loan out a smaller portion of their reserves, resulting in fewer loans.
When the required reserve ratio is raised, banks must loan out a smaller portion of their reserves, resulting in fewer loans.