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Author Question: When banks hold a large amount of excess reserves, which of the following tools would the Fed most ... (Read 140 times)

K@

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Question 1

When banks hold a large amount of excess reserves, which of the following tools would the Fed most likely use when it wants to increase the interest rate?


◦ raising the reserve requirement
◦ raising the interest rate it pays to banks on their reserves
◦ raising the discount rate
◦ making an open market purchase

Question 2

When banks hold a large amount of excess reserves, which of the following tools would the Fed most likely use to encourage banks to lend more of these excess reserves?


◦ lowering the reserve requirement
◦ lowering the interest rate it pays to banks on their reserves
◦ lowering the discount rate
◦ making an open market sale


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Marked as best answer by K@ on Apr 19, 2019

smrerig

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