How does banking affect the money supply?

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The Federal or Fed can influence the money supply by basically modifying the reserve requirements, Although it generally refers to basically the amount of funds banks must be able to hold against deposits in bank accounts. However, by lowering the reserve requirements, banks are much able to loan more more money. Loaning more money will increase the overall supply of money in our economy or in the economy.

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The Feds could influence the money supply by modifying the reserved requirements, Although it generally refers to the amount of funds banks must be able to hold against deposits in bank accounts. However, by lowering the reserve requirements, banks are much able to loan more more money. Loaning more money will increase the overall supply of money in our economy or in the economy.

Explanation:

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