Currently, the excess reserves of banks are very large. If banks used these excess reserves to extend
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Currently, the excess reserves of banks are very large. If banks used these excess reserves to extend additional loans, what would happen to the money supply? Explain. If the Fed wanted to keep the banks from extending the additional loans, how could it do so?
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If banks used their excess reserves to extend additional loans the money supply would increase This is because when a bank makes a loan it creates a n...View the full answer
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Related Book For 
Macroeconomics Private And Public Choice
ISBN: 9780357134009
17th Edition
Authors: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
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