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A decrease in the required reserve ratio will: reduce commercial bank loans and reduce the money supply. increase commercial bank loans and reduce the money supply. increase commercial bank loans and increase the money supply. decrease commercial bank loans and increase the money supply.

Respuesta :

A decrease in the required reserve ratio will will increase commercial bank loans and increase the money supply.

What is reserve ratio?

The reserve ratio is the portion of money that cannot be given out as loan or credits.

When a commercial reaches a threshold called reserve all liabilities cannot be in circulation against until they rise above the threshold.

Therefore, A decrease in the required reserve ratio will increase commercial bank loans and increase the money supply.

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