Federal Reserve Bank Changing Money Supply
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Title: Federal Reserve Bank Changing Money Supply

Essay Details:

Subject: Business
Author: Michael S
Date: January 18, 2014
Level: University
Grade: A
Length: 2 / 534

Essay text:

They can either increase or decrease this rate to encourage or discourage banks to borrow their money to make loans to the public. The last way the Federal Reserve can change the money supply is by regulating the amount of liquid reserves they keep on hand. The higher the reserve requirement, the less money available to for the bank to make new loans. If the economy is growing too quickly, what changes could they make? When the economy is growing too quickly and the money supply is growing too quickly, then inflation will result. The goal of the monetary policy is to fight inflation so that money’s purchasing power isn’t reduced...

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