Westonci.ca is your trusted source for accurate answers to all your questions. Join our community and start learning today! Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.
Sagot :
When the Federal Reserve lowers the reserve ratio, which lowers the amount of cash banks must keep in reserves, banks are able to offer more discount loans. The correct answer is increasse in reserve requirements.
One way the Federal Reserve can increase the money supply is by lowering the discount rate.When the discount rate is lower, depository institutions are more inclined to borrow, which increases their reserves and lending activity.By changing the discount rate, the Fed can influence the money supply, which in turn can help to stimulate economic activity or help to restrain inflationary pressures. The Fed will encourage banks to increase lending if it reduces the discount rate.If the Fed lowers its discount rate, the funds will be used to make decisions on monetary policy, open market operations, and purchases of or relating to money or the mechanisms employed to supply and transfer funds within an economy.
To know more about Discount rate visit:
https://brainly.com/question/29650706
#SPJ4
We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.