How does the central bank control money supply in the economy from 2 m – InterviewSolution

1.	How does the central bank control money supply in the economy from 2 macro?
Answer» One of the BASIC methods USED by allcentral banks to control the quantity ofmoney in an economy is the reserve requirement. ... If it WANTS to reduce the amount of money in the economy, it can increase the reserve requirement. This means that bankshave less money to lend out and willthus be pickier about ISSUING loans.

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