Which of the following would likely have the greatest effect on the banking system and their ability to loan money?

Question

Quizplus · Accepted Answer

A change in the reserve ratio directly affects the amount of money banks can loan out, as it determines how much they must hold in reserves. A 5 percentage point increase in the reserve ratio would decrease the amount of money banks can loan out and therefore have the greatest effect on their ability to loan money. The other options would have a more indirect or lesser impact on the banking system's ability to loan money.

Which of the Following Would Likely Have the Greatest Effect