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The purchase of securities from the public increase the ______ ability of the commercial banking system.

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ayokenny2001

The purchase of securities from the public increase the lending ability of the commercial banking system.

When the central bank purchases securities from the public through the use of monetary policy such as treasury bills, it increases the reserves of commercial banks thereby increasing their lending capacity.

Federal government uses this type of monetary policy to regulate the supply of money in an economy.

Thus, there would be an increase in the lending ability of commercial banking system when there are purchases of securities from the public.

Read more at: https:https://brainly.com/question/1558238

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