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For this example we will use 10%, so the bank must keep $100,000 in reserve but the rest may be loaned out or used by the account holder. This money may branch off to numerous other banks these banks will also take out what percentage must be held in reserve liabilities and use the rest. This chain will continue and in each situation it will increase the money supply by a smaller percentage in each situation.
With this information on how the Federal Reserve currently works we will now go over the possibilities of the Federal Reserve looking at purchasing stocks on the New York stock exchange. In the realm of things it is possible for the Federal Reserve to conduct monetary policy or the influencing of the GDP and the inflation rate through
the purchasing of stocks...
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