When the FED increases the reserve requirement it forces banks to increase the number of loans they make.

Name: When the FED increases the reserve requirement it forces banks to increase the number of loans they make.
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When the FED increases the reserve requirement, it forces banks to hold a higher percentage of their deposits and reduces the amount of money available for lending. Therefore, banks would actually decrease the number of loans they make.

When the FED Increases the Reserve Requirement It Forces Banks