Which of the following Fed actions increases the excess reserves of commercial banks?
A)selling bonds to the public
B)selling bonds to commercial banks
C)increasing the discount rate
D)lower the reserve ratio

Question

Quizplus · Accepted Answer

Lowering the reserve ratio increases the excess reserves of commercial banks by reducing the amount of funds they are required to hold, thus freeing up more funds for lending or other purposes.

Which of the Following Fed Actions Increases the Excess Reserves