Increasing the reserve requirement reduces the money supply.
Increasing the reserve requirement forces banks to hold more reserves that cannot be lent out,thereby slowing the money creation process.

Question

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Increasing the reserve requirement reduces the amount of money that can be lent out, effectively decreasing the money supply. This is because banks are required to hold a higher percentage of their deposits in reserves, which limits the amount of money they have available to lend out to borrowers. As a result, the money creation process slows down, as banks cannot create as much new money through lending.

Increasing the Reserve Requirement Reduces the Money Supply