INQUIZITIVE Chapter 17: Money and the Federal Reserve Page 589 17.3. How does the Federal Reserve control the money supply? In the wake of the Great Recession, how did the amount of reserves held by banks change? Click or tap a choice to answer the question. The Fed increased the reserve requirement so banks would hold more cash and offer fewer loans. The Fed began paying interest on reserves, so the amount of excess reserves held by banks plummeted to nearly zero. The Fed stopped paying interest on reserves, so the amount of excess reserves held by banks plummeted to nearly zero. The Fed stopped paying interest on reserves, so the amount of excess reserves held by banks increased significantly. The Fed eliminated the reserve requirement. The Fed began paying interest on reserves, so the amount of excess reserves held by banks increased significantly. 2