Author Question: When the Fed raises the required reserve ratio, then the: a. ability of banks to make loans is ... (Read 85 times)

lracut11 · **on:** Jun 30, 2018

When the Fed raises the required reserve ratio, then the:
a. ability of banks to make loans is restricted.
b. ability of banks to make loans is enhanced.
c. ability of banks to make loans is unaffected.
d. interest rate that banks pay to the Fed to borrow money is increased.
e. interest rate that banks pay to other banks to borrow money is increased.

Question 2

When the Fed raises the required reserve ratio, it:
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public.
b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public.
c. increases the amount of excess reserves that banks hold, encouraging them to make loans to he general public.
d. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
e. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.