dananphil9891 dananphil9891
  • 01-12-2017
  • Business
contestada

An increase in the reserve requirement increases reserves and decreases the money supply.
a. true
b. false

Respuesta :

meerkat18
meerkat18 meerkat18
  • 14-12-2017
This is true. An increase in the reserve requirement is put in place to prevent inflation. This is what you call a contractionary policy or a restrictive monetary policy. When this happens, the amount of reserves increases and the money supply decreases because liquidity is reduced.
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