Power to conduct monetary policy, Microeconomics

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Power to conduct monetary policy

You are an economic adviser to a country whose central bank has recently been granted the power to conduct monetary policy. The central bank is considering increasing reserve requirements in an effort to ensure the stability of the banking system and seeks your advice. What factors would you recommend the central bank take into account when trying to predict the impact of such a policy?

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Microeconomics: Power to conduct monetary policy

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