Question

How could the federal reserve encourage banks to lend out more of their reserves? reduce the discount rate increase the prime rate reduce the money supply raise the required amount of reserve?

Answer 1

REDUCING THE DISCOUNT RATE

Step-by-step explanation:

Answer 2

The federal reserve may encourage banks to lend out more of their reserves by REDUCING THE DISCOUNT RATE. Discount rates are interest rates that are set by the Federal Reserve. They do this so that the bank can reduce liquidity problems and the decrease the pressures of reserve requirements.