When commercial banks borrow reserves from the Fed, the quantity of reserves in the banking system ________ and, ultimately, the money supply ________.

Name: When commercial banks borrow reserves from the Fed, the quantity of reserves in the banking system ________ and, ultimately, the money supply ________.
Brand: Quizplus
Rating: 4.9 (50 reviews)

Question

Quizplus · Accepted Answer

Loans of reserves by the Fed directly increase the quantity of reserves in the banking system, leading ultimately to increases in bank deposits and the money supply.

When Commercial Banks Borrow Reserves from the Fed, the Quantity