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Which of the following is NOT an argument for the Federal Reserve paying interest on excess reserve holdings?

  • Paying interest reduces the effective tax on deposits.
  • Paying interest will help in the implementation of monetary policy.
  • Paying interest will help the Federal Reserve have more control of the amount of discount loans.
  • Paying interest increases the capacity of the Fed's balance sheet which will make it easier to address financial crises.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M940253

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