Question

If the federal reserve increases the interest rate on bank deposits at the fed, banks will want to hold question 4 options: fewer reserves, so the reserve ratio will fall. fewer reserves, so the reserve ratio will rise. more reserves, so the reserve ratio will fall. more reserves, so the reserve ratio will rise.

Answer 1

If the federal reserve increases the interest rate on bank deposits at the fed, banks will want to hold more reserves, so the reserve ratio will rise.