To decrease the money supply using the reserve requirements, the fed would typically raise the reserve requirements for banks.
The reserve requirement is the sum of money that a bank is required to hold in reserve in order to meet its obligations in the case of unanticipated withdrawals. Reserve requirements are a technique the central bank uses to change the amount of money in the economy and impact interest rates.
A higher reserve requirement indicates that the Federal Reserve is conducting a contractionary monetary policy. If banks have higher reserve requirements, there would be less money available to lend to consumers and businesses.
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