Question: The Federal Reserve closely monitors the reserve positions of monetary institutions. Locate the aggregate required reserves held by depository institutions, reported on a monthly basis by the Federal Reserve’s Statistical Releases website, at http:www.federalreserve.gov/releases (category H3). Compare the required reserves that were reported during the months prior to and then during the most recent recession of 2001. How do reported reserves move the business cycle performance during this time? Do the changes in required reserves seem to have the predicted effect on the monetary base? Why or why not?

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