Recall Application 2, "The Growth in Excess Reserves" to answer the following questions:
-Based on what you learned from the application, the Fed can induce banks to lend more and increase the money supply by:
A) lowering the interest rate for excess reserves.
B) requiring banks to hold on to more excess reserves.
C) raising the interest rate for excess reserves.
D) raising the reserve requirement.
Correct Answer:
Verified
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