fewer deposits

Why Does The Fed Rarely Use The Reserve Requirement?

by

Why Does The Fed Rarely Use The Reserve Requirement? Why does the Fed rarely use the reserve requirement as an instrument of monetary policy? Changes in the required reserve ratio cause radical or strong changes in the monetary system. It is difficult for financial institutions to adjust to changes in the required reserve ratio. Why

How The Open Market Affect The Money Supply?

by

How The Open Market Affect The Money Supply? In open operations, the Fed buys and sells government securities in the open market. If the Fed wants to increase the money supply, it buys government bonds. This supplies the securities dealers who sell the bonds with cash, increasing the overall money supply. What are open market