Why does the Fed pay interest to banks?

It is interest on money held in reserve.
It is interest on credit available to the Fed.
It is interest on loans taken by the Fed.
It is interest on government investments.

Reserves is the total amount of a bank's deposit that is not given out as loans and kept with the Fed. The amount of reserves is dependent on the reserve requirement.

The purpose of reserves is for to have money for meet unforeseen situation. it is also a means to control money supply.

To learn more about reserve , please check: https://brainly.com/question/6831267

Why does the Fed pay interest to banks?It is interest on money held in reserve.It is interest on credit available to the Fed.It is interest on loans taken by the Fed.It is interest on government investments.​

Respuesta :

What are reserves?

Otras preguntas

Why does the Fed pay interest to banks?

It is interest on money held in reserve.
It is interest on credit available to the Fed.
It is interest on loans taken by the Fed.
It is interest on government investments.