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History, 29.06.2019 17:30 raishagibson

After the 2008 recession the amount of reserves in the us banking system increased. because of federal reserve actions, required reserves increased from $44 billion to $60 billion. however, banks started holding more reserves than required. by january 2009, banks were holding $900 billion in excess reserves. the federal reserve started playing interest on the excess reserves that the banks held. what possible impact will these unused reserves have on the economy? a) the interest rate on loans will fallb) people will demand more foreign goodsc) people will start borrowing more moneyd) the economy will face inflatione) foreign investments will increase

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