The Federal Reserve System uses three main tools to control the financial activities of the nation’s banks—raising or lowering the discount rate, raising or lowering the reserve requirement, or buying goverment bonds or selling federal securities. If the government chose to raise the reserve requirements on banks, what would likely occur?
Banks would lend more money.
Banks would lend less money.

Question

The Federal Reserve System uses three main tools to control the financial activities of the nation’s banks—raising or lowering the discount rate, raising or lowering the reserve requirement, or buying goverment bonds or selling federal securities. If the government chose to raise the reserve requirements on banks, what would likely occur?  
Banks would lend more money.
Banks would lend less money.<--
Banks would borrow more money from the Fed.
Banks would borrow less money from the Fed.
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