The primary purpose of the reserve requirements for banks is not really to ensure liquidity to meet withdrawals,
but rather to allow the Fed some control over the money supply.

Question

Quizplus · Accepted Answer

Reserve requirements are one of the tools the Fed uses to influence the amount of money in circulation and to manage inflation. While they do provide some buffer for banks to cover withdrawals, their primary purpose is to regulate the money supply.

The Primary Purpose of the Reserve Requirements for Banks Is