According to William McChesney Martin, an increase in free reserves indicated

Question

Quizplus · Accepted Answer

William McChesney Martin, who served as the chairman of the Federal Reserve from 1951 to 1970, believed that increases in free reserves indicated an easing of money market conditions. Free reserves refer to the excess reserves that banks hold beyond the required level, and an increase in free reserves provides banks with additional funds to lend out, thereby increasing the money supply and lowering interest rates. As a result, an increase in free reserves generally indicates a more accommodative monetary policy stance, which is often associated with an easing of money market conditions.

According to William McChesney Martin, an Increase in Free Reserves