A decrease in the excess reserves banks want to hold, together with people depositing currency into their demand deposit accounts, would:

Question

Quizplus · Accepted Answer

A decrease in the excess reserves banks want to hold means they have more funds available to lend out, which increases the money supply. Additionally, when people deposit currency into their demand deposit accounts, this increases the amount of money in circulation and also contributes to an increase in the money supply.

A Decrease in the Excess Reserves Banks Want to Hold