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6 September, 14:50

The primary purpose of the legal reserve requirement is to:

A) Provide a dependable source of interest income for commercial banks. B) Prevent commercial banks from earning profitsC) Provide a means by which the monetary authorities can influence the lending ability of commercial banks. D) Prevent banks from hoarding too much vault cash.

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  1. 6 September, 17:50
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    Answer: The correct answer is choice C.

    Explanation: The primary purpose of the legal reserve requirement is to provide a means by which monetary authorities can influence the lending ability of commercial banks. These policies are the way in which the Federal Reserve can control the money supply.
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