Problem
During 2009 the Fed started paying interest to banks on the reserves they held. The Fed also seemed surprised that the banks then held on to their reserves rather than lending them out. Can you suggest a policy change that would induce the banks to lend out more of their reserves? What would you do if you wanted them to lend out even fewer funds to potential borrowers? Explain your answers.
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.