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Economics
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20 Oct 2020

To combat inflation Fed should ______ the reserve requirements with banks.

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Macroeconomics
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Monetary and Fiscal Policy: Application
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Vaishali Yadav
Vaishali YadavLv10
20 Oct 2020

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Related questions

Reserve requirements are changed infrequently because

a. banks can determine the amount of reserves they wish to hold regardless of the reserve requirement.

b. banks cannot usually meet the reserve requirement so the Fed does not monitor it.

c. banks set loan decisions based on credit ratings and do not need to focus on reserve requirements.

d. banks set long-term policy decision, loan decisions, and deposit decisions based on the reserve requirement.

 

Reserve requirements are regulations concerning:
 
(i) the interest rate at which banks can borrow from the Fed.
(ii) the amount banks are allowed to borrow from the Fed.
(iii) reserves banks must hold based on the number and type of loans they make. 
(iv) the amount of reserves banks must hold against deposits. 

Which of the following actions that fed uses to increase the supply of money.

A. Lowering the reserve requirements for banks and raising the discount rate that banks pay on short-term loans from the Federal Reserve Bank to increase supply.

B. Raising the bank reserve requirement and raising the discount rate that banks pay on short-term loans from the Federal Reserve Bank to increase supply.

C. Lowering the reserve requirements for banks and lowering the discount rate that banks pay on short-term loans from the Federal Reserve Bank to increase supply.

D. Raising the bank reserve requirement and lowering the discount rate that banks pay on short-term loans from the Federal Reserve Bank to increase supply. 

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