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by Anonymous on November 12th, 2009

Anonymous

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Help answer this question below.

If each bank in the United States had to keep 100 percent of checkable deposits as reserves, each $1 the Fed injected into new reserves could increase the money supply by as much as a) $1 b) $2 c) $100 d) zero e) a penny (2009-11-12)

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Answers. 1 helpful answer below.

  • by Thinker on November 12th, 2009

    Thinker

    I don't understand your question...Banks are only required to keep 10% of their deposits on hand. yet for every $100 deposited they can loan $900 thereby creating $900 out of thin air.

    The Federal Reserve is not federal nor a reserve but a private corporation who controls all the US currency in circulation and sets the value of in violation of the US Constitution which states, Only the congress has the right to coin money and set the value there of. Artical 1 paragraph 5. The USA borrows the currency it needs from the Fed and pays interest on that money.

    I don't know if this helps you or not with your question

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