008, the Federal Reserve began paying interest on reserves held by banks. The interest rate they paid was greater than the federal funds rate, the interest rate banks receive from loaning their excess reserves to other banks. What effect did this policy have on the reserve-deposit ratio?
008, the Federal Reserve began paying interest on reserves held by banks. The interest rate they paid was greater than the federal funds rate, the interest rate banks receive from loaning their excess reserves to other banks. What effect did this policy have on the reserve-deposit ratio?
Chapter19: Money Creation
Section: Chapter Questions
Problem 13SQ
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In 2008, the Federal Reserve began paying interest on reserves held by banks. The interest rate they paid was greater than the federal funds rate, the interest rate banks receive from loaning their
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