the mooney supply will go down because the feds do not make any money
Open market operations ( purchasing bonds), Discount rates ( lowering the interest rates) and Reserve requirement.
If the Federal Reserve increases the reserve requirement, banks must hold a larger percentage of their deposits as reserves and can lend out less money. This reduction in lending capacity typically leads to a decrease in the overall money supply in the economy. Consequently, it can result in tighter credit conditions, potentially slowing economic growth and increasing interest rates.
will discourage aggregate demand.
Increasing the reserve requirement for banks will make less money available to borrowers and thus slow the economy's growth.
When the required reserve ratio is lowered, banks can loan out more money.
Less money in the economy.
more bank lending and more money in the economy
Open market operations ( purchasing bonds), Discount rates ( lowering the interest rates) and Reserve requirement.
By the lowering of the required reserve-level rate, banks can increase the proportion of funds they are able to lend to customers.
If the Federal Reserve increases the reserve requirement, banks must hold a larger percentage of their deposits as reserves and can lend out less money. This reduction in lending capacity typically leads to a decrease in the overall money supply in the economy. Consequently, it can result in tighter credit conditions, potentially slowing economic growth and increasing interest rates.
It protects public deposits.
will discourage aggregate demand.
Increasing the reserve requirement for banks will make less money available to borrowers and thus slow the economy's growth.
Reserve requirement
When the required reserve ratio is lowered, banks can loan out more money.
the percentage of a bank's total deposits that must be kept in its possession
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