Problem
Under very particular conditions banks would like to borrow from the Fed and not use these funds to make loans, but rather they would keep them in the form of excess reserves. What would be the effect on the monetary base and the money supply of an increase in discount loans that are kept in the form of excess reserves?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.