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OpenStudy (anonymous):

The money supply is the total amount of money available in the economy. How do changes in the money supply affect people and businesses?

OpenStudy (anonymous):

How does banking affect the money supply?

OpenStudy (anonymous):

What would happen if banking didn’t exist?

OpenStudy (confluxepic):

@77777jeannie77777 @~

OpenStudy (anonymous):

can u tell me?

OpenStudy (confluxepic):

The Fed can influence the money supply by modifying reserve requirements, which is the amount of funds banks must hold against deposits in bank accounts. By lowering the reserve requirements, banks are able loan more money, which increases the overall supply of money in the economy. Conversely, by raising the banks' reserve requirements, the Fed is able to decrease the size of the money supply.

OpenStudy (anonymous):

ok

OpenStudy (anonymous):

other two questions?

OpenStudy (anonymous):

all in one post pls

OpenStudy (confluxepic):

Because people will have lower or higher incomes.

OpenStudy (confluxepic):

That's how it affects them.

OpenStudy (anonymous):

1 post?

OpenStudy (confluxepic):

The Fed can influence the money supply by modifying reserve requirements, which is the amount of funds banks must hold against deposits in bank accounts. By lowering the reserve requirements, banks are able loan more money, which increases the overall supply of money in the economy. Conversely, by raising the banks' reserve requirements, the Fed is able to decrease the size of the money supply. Because people will have lower or higher incomes.

OpenStudy (anonymous):

thx :)

OpenStudy (confluxepic):

:)

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