Which policy would cause a reduction in both excess bank reserves and aggregate demand?

Question

Quizplus · Accepted Answer

An increase in the reserve requirement would force banks to hold more reserves and lend out less money, leading to a reduction in excess bank reserves and ultimately a decrease in aggregate demand. The other options would not have as direct of an impact on excess reserves or aggregate demand. A reduction in the discount rate would encourage banks to borrow more and increase lending, potentially leading to an increase in excess reserves and aggregate demand. The Federal Reserve purchasing government securities in the open market would increase bank reserves, but it would also increase the money supply and potentially lead to an increase in aggregate demand. A reduction in taxes would increase disposable income and consumer spending, leading to an increase in aggregate demand.

Which Policy Would Cause a Reduction in Both Excess Bank