Which of the following actions would allow banks to lend out more money?

Question

Quizplus · Accepted Answer

A decrease in the discount rate would encourage banks to borrow more money from the Fed, which in turn would increase their reserves and allow them to lend out more money. An increase in the required reserve ratio or the federal funds rate would have the opposite effect, reducing the money available for lending. The option of increasing both the required reserve ratio and the federal funds rate would be even more restrictive.

Which of the Following Actions Would Allow Banks to Lend