Decreasing the required reserve ratio shifts the money supply curve to the ________ and ________ the equilibrium interest rate.

Name: Decreasing the required reserve ratio shifts the money supply curve to the ________ and ________ the equilibrium interest rate.
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Question

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Decreasing the required reserve ratio allows banks to lend more, increasing the money supply, which shifts the money supply curve to the right and decreases the equilibrium interest rate.

Decreasing the Required Reserve Ratio Shifts the Money Supply Curve