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Question 2 of 10
What happens when a country's central bank increases reserve requirements
for banks?
A. Banks are forced to set aside more of their money instead of
lending it.
B. Banks must pay the government interest on all cash they keep on
hand.
C. Banks must pay a higher interest rate to borrow money from the
government
D. Banks are required to sell all of their treasury securities on the
open market
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Respuesta :

Answer: Banks are forced to set aside more of their money instead of lending it.

When the country's central bank increases reserve requirements

for banks so here bank should be forced for setting aside.

What are reserve requirements?

It is the amount of funds where the bank should hold the reserve to ensure for meeting out the liabilities when the withdrawals should be done. It is applied by the central bank to rise or reduce the money supply and impact the rate of interest.

Hence, When the country's central bank increases reserve requirements

for banks so here bank should be forced for setting aside.

Learn more about rate here: https://brainly.com/question/14565608

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