After the 2008 recession the amount of reserves in the us banking system increased. because of federal reserve actions, required reserves increased from $44 billion to $60 billion. however, banks started holding more reserves than required. by january 2009, banks were holding $900 billion in excess reserves. the federal reserve started playing interest on the excess reserves that the banks held. what possible impact will these unused reserves have on the economy? a) the interest rate on loans will fallb) people will demand more foreign goodsc) people will start borrowing more moneyd) the economy will face inflatione) foreign investments will increase

the correct answer is option d

the economy will face inflation

the correct answer is d. the monetary reserve is a set of funds represented in currency, money or similar, saved as a forecast of possible needs or for legal reasons.

the increase or decrease in the monetary base influences in the increase or decrease of the inflation rate. therefore, the excess of monetary reserve will cause the reduction of inflation.

. political or economical policy that isolates a country from participating in international relationships. it has been suggested that the united states participates in isolationism because of its lack of involvement in particular wars or alliances.