Which of the following Fed actions increases the excess reserves of commercial banks?
A) Selling bonds to the public
B) Selling bonds to commercial banks
C) Increasing the discount rate
D) Lower the reserve ratio

Question

Quizplus · Accepted Answer

Lowering the reserve ratio would decrease the amount of required reserves that commercial banks are mandated to hold, increasing their excess reserves.

Which of the Following Fed Actions Increases the Excess Reserves