The federal reserve is likely to enact that reserve requirement should be lower so that there will be a decrease the interest rate in the case when current output is less than potential output.
The Federal reserve does enhance the economy by reducing the interest rate that banks pay each other for overnight loans.
In conclusion, the federal reserve is likely to enact that reserve requirement should be lower so that there will be a decrease the interest rate in this case when the current output is less than potential output.
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