In 2008, the Federal Reserve began paying interest on reserves held by banks. The interest rate they paid was greater th

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In 2008, the Federal Reserve began paying interest on reserves held by banks. The interest rate they paid was greater th

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In 2008, the Federal Reserve began paying interest on reservesheld by banks. The interest rate they paid was greater than thefederal funds rate, the interest rate banks receive from loaningtheir excess reserves to other banks. What effect did this policyhave on the reserve-deposit ratio?
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