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What Impact Would a Decrease in the Reserves Banks Want

question 138

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What impact would a decrease in the reserves banks want to hold,together with people depositing currency into their demand deposit accounts,have on the money supply?


Definitions:

Balance of Payments

A record of all economic transactions between the residents of a country and the rest of the world in a particular period.

Goods and Services

Refers to the physical products and intangible services that are produced and consumed by individuals or businesses.

Goods Imports

The act of bringing products or services into one country from another for the purpose of trade or sale.

Current Account Entry

Transactions that reflect the difference between a country's savings and its investment in a given period, including trade balance and foreign income.

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