________ can be altered to change the lending capacity of the banking system.

Question

Quizplus · Accepted Answer

The reserve requirement refers to the percentage of deposits that banks are required to hold in reserve, which is set by the central bank. By increasing or decreasing the reserve requirement, the central bank can influence the amount of money banks are able to lend out, thus changing the lending capacity of the banking system. Points charged on a typical first mortgage and the dollar exchange rate are factors that affect individual borrowers' ability to obtain loans, while gold reserves are not directly related to the lending capacity of the banking system.

________ Can Be Altered to Change the Lending Capacity of the Banking