China Cuts Banks’ Reserve Ratios The People’s Bank of China announces it will cut the required reserve ratio. Source: The Financial Times , February 19, 2012 Explain how lowering the required...

China Cuts Banks’ Reserve Ratios

The People’s Bank of China announces it will cut

the required reserve ratio.

Source: The Financial Times , February 19, 2012

Explain how lowering the required reserve ratio

will impact banks’ money creation process.

The Money Market (Study Plan 24.5)