An increase in the required reserve ratio ____ excess reserves and _____ the money supply.

Name: An increase in the required reserve ratio ____ excess reserves and _____ the money supply.
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An increase in the required reserve ratio decreases excess reserves because banks are required to hold more funds in reserve and cannot lend as much. This, in turn, decreases the money supply because there is less money being created through the process of lending.

An Increase in the Required Reserve Ratio ____ Excess Reserves