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AP® Macroeconomics

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Moderate

Tools of the Fed: Bank Loan Amount

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Suppose John deposits $100 into his bank.

The amount the bank must keep on hand for the purpose of loaning money to other customers is a part of which of the following tools of the Fed?

A

Reserve requirement.

B

Open Market Committee.

C

Discount rate.

D

Buying bonds.

E

Margin requirement.