1.Excess reserves are frequently called idle reserves , suggesting that they are not useful. Does the episode of the rise in reserve requirements in 1936–1937 bear out this view? 2. “When the economy...

1.Excess reserves are frequently called
idle reserves, suggesting that they are not useful. Does the episode of the rise in reserve requirements in 1936–1937 bear out this view?

2. “When the economy enters a recession, an interestrate target will lead to a slower rate of growth for the money supply.” Explain why this statement is true. What does it say about the use of interest rates as targets?