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The Fed can manipulate the reserve ratio in order to influence the ability of commercial banks to do what
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The Fed can manipulate the reserve ratio in order to influence the ability of commercial banks to do what

User Vimal Stan
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1 Answer

5 votes

Answer:

loan out money

Step-by-step explanation:

Reserve ratio is the percentage of deposits that is required of commercial banks to keep as reserves. The lower the ratio, the higher the increase in money supply

If the required reserve ratio is 10% and $100 is deposited, reserves would be $10 and $90 would be lent out

User Juan Carlos Oropeza
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