The job of the monetary authorities in limiting the supply of money may be made more complex if chartered banks initially have substantial excess reserves.

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If chartered banks initially have substantial excess reserves, it can be more difficult for the monetary authorities to limit the supply of money because the banks may not need to borrow from the central bank to meet their reserve requirements, and therefore may not be as responsive to changes in interest rates set by the central bank. Additionally, the excess reserves can potentially be used by the banks to make more loans, which would increase the money supply.

The Job of the Monetary Authorities in Limiting the Supply