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The federal reserve is reluctant to change the required reserve requirments because?

User Cardano
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1 Answer

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Answer:

It could change money supply

Step-by-step explanation:

The federal reserve do not always change the reserve requirement because this would change the money supply in the economy which can either lead to an inflation or a deflation.

For instance, when there is a reduction in reserve requirement, it increases money supply, which can result to the increase in inflation.

User Endi Zhupani
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