Which statement describes how borrowers will most likely benefit when the fed reduces reserve requirements?

A. Loan requirements

B. interest rates will likely decrease

C. housing prices will likely decrease

D. investment opportunities will likely improve

Question

Social Studies

Gabriel Bean

6 November, 19:51

Which statement describes how borrowers will most likely benefit when the fed reduces reserve requirements?

A. Loan requirements

B. interest rates will likely decrease

C. housing prices will likely decrease

D. investment opportunities will likely improve

+4

Answers (2)

Know the Answer?

Jessica Wood · Answer 1

B. interest rates will likely decrease

Madelyn Baird · Answer 2

The correct answer is option:

B. interest rates will likely decrease.

Explanation:

Reserve requirement refers to the amount of cash required by the Federal Governing Board to keep commercial banks in reserve against deposits made by their clients. The amount of money held in reserve determines how much cash the banks will have at their fingertips to carry out their financial transactions. If the Federal cuts the reserve requirement for commercial banks, then the bank will have more money to lend to the lenders, lowering interest rates on the banks ' loans.

Which statement describes how borrowers will most likely benefit when the fed reduces reserve requirements?A. Loan requirementsB. interest rates will likely decreaseC. housing prices will likely decreaseD. investment opportunities will likely improve

Which statement describes how borrowers will most likely benefit when the fed reduces reserve requirements?

A. Loan requirements

B. interest rates will likely decrease

C. housing prices will likely decrease

D. investment opportunities will likely improve