Ask Question
3 August, 17:09

An increase in the reserve requirement increases reserves and decreases the money supply.

a. true

b. false

+1
Answers (1)
  1. 3 August, 17:16
    0
    This is true. An increase in the reserve requirement is put in place to prevent inflation. This is what you call a contractionary policy or a restrictive monetary policy. When this happens, the amount of reserves increases and the money supply decreases because liquidity is reduced.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “An increase in the reserve requirement increases reserves and decreases the money supply. a. true b. false ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers