The textbook I’m reading says that the reserve ratio is like the biggest “tool” that the fed has. They are increasing interest rates, but then they are having the reserve ratio at 0% and they are engaging in reverse repo to make sure that banks have plenty of cash. I don’t get it.
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Not your question, but how old is your textbook? 1950?
Also: lots of nonsense about “fractional reserve banking” from people who obvioulsy have no clue. Banks don’t “lend out deposits”, this isn’t 1850. When banks lend, they create that money on the spot.
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