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16 December, 16:48

Which of the following best describes the purpose of raising and lowering the

required reserve ratio?

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Answers (2)
  1. 16 December, 16:55
    0
    Answer: To manage the economy by increasing or decreasing the amount of loans being made.

    Explanation:

    next time put the choices
  2. 16 December, 17:10
    0
    It is used by Fed to manage the economy by increasing or decreasing the amount of loans being made

    Explanation:

    The Fed decides on required reserve ratio for the banks and other financial institutions; t can lower or raise it. Reserve ratio is the portion of all the money that bank are required to sets aside and hold onto; this means they are not allowed to lend that out to borrowers. This is a technique that is used to control the supply of money in the economy. By decreasing this ratio, banks will have more money to lend out and vice versa.
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