If the Fed paid a lower interest rate to banks on their reserves at the Fed, the money supply would tend to rise.

Name: If the Fed paid a lower interest rate to banks on their reserves at the Fed, the money supply would tend to rise.
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When the Fed pays a lower interest rate on reserves, banks are less incentivized to hold onto them and are more likely to lend them out, which increases the money supply in the economy.

If the Fed Paid a Lower Interest Rate to Banks