Final answer:
To expand the supply of money in Japan, the head of the Central Bank should decrease the required reserve ratio.
Step-by-step explanation:
If the head of the Central Bank of Japan wants to expand the supply of money in Japan, decreasing the required reserve ratio will achieve this goal.
The required reserve ratio refers to the percentage of deposits that banks are required to hold in reserve. When the required reserve ratio is decreased, it means that banks are required to hold a smaller portion of their deposits in reserve and can lend out more money. This increases the supply of money in the economy.
For example, if the required reserve ratio is 10% and a bank receives a deposit of $1,000, it would be required to hold $100 (10% of $1,000) in reserve and can lend out the remaining $900. However, if the required reserve ratio is decreased to 5%, the bank would only need to hold $50 (5% of $1,000) in reserve and can lend out $950. This increase in lending helps to expand the supply of money in the economy.
Learn more about Central Bank of Japan, required reserve ratio, supply of money