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16 February, 16:35

The primary purpose of the legal reserve requirement is toa. Prevent banks from hoarding too much vault cash. b. Provide a means by which the monetary authorities can influence the lending ability of commercial banks. c. Prevent commercial banks from earning excess profits. d. Provide a dependable source of interest income for commercial banks.

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  1. 16 February, 17:29
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    Answer: The correct answer is choice b.

    Explanation: The primary purpose of the legal reserve requirement is to provide a means by which the monetary authorities can influence the lending ability of commercial banks. Basically, it is the Federal Reserve's way of controlling the money supply.
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