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The Federal Reserve Bank of the United States

Another mechanism the Federal Reserve Bank uses occasionally involves changing the reserve requirements for commercial banks. Banks must have sufficient cash on hand to meet any foreseeable demand for cash made by depositors. The specific amount of research is dictated by the Federal Reserve Bank. By increasing this reserve, the Federal Reserve Bank has the ability to pull money out of the economy and by reducing the amount of required reserves the Federal Reserve Bank can inject money into the economy. This tool is rarely used


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The Federal Reserve Bank of the United States. (2009, June 09). In Retrieved 21:51, October 25, 2014, from
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