The Federal Reserve (the "Fed") can make it so that banks have to keep more money in their accounts, and can also sell "government bonds" to reduce the amount of money in circulation. This is called "tight monetary policy".
These are questions that the above text answers:
1. What is the role of the Federal Reserve in the loan process?
2. How does the Federal Reserve influence banks to keep more money in their accounts?
3. What is the purpose of selling government bonds in relation to the amount of money in circulation?
4. What is meant by "tight monetary policy"?
5. How does the Federal Reserve reduce the amount of money in circulation?
6. What actions can the Federal Reserve take to make banks keep more money in their accounts?
7. What is the impact of tight monetary policy on the loan process?
8. How does the Federal Reserve control the amount of money in circulation?
9. What is the significance of government bonds in relation to the Federal Reserve's actions?
10. How does the Federal Reserve's role in the loan process affect banks?