To increase the money supply using the reserve requirements, what would the Fed typically do?
A) increase the reserve requirement for banks
B) reduce the reserve requirement for banks
C) make each bank set its own reserve levels
D) let each bank get more currency from the Treasury

Question

Quizplus · Accepted Answer

To increase the money supply using reserve requirements, the Fed would typically reduce the reserve requirement for banks. This would free up more funds for banks to loan out and potentially encourage more borrowing and spending, thus increasing the money supply.

To Increase the Money Supply Using the Reserve Requirements, What