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On the other hand, selling them will reverse the movement.
The RRR is the percentage of deposits any one bank holds as its reserves which is mandated by the Fed. When the ratio is decreased, banks can lend more money to their customers due to not having to hold as much, the reverse is true if the ratio is increase. In the simulation it shows the higher the ratio the lower inflation and GDP will be, but unemployment will be higher, and again the opposite is true if the ratio is raised.
The FFR and DR work together, due to depending on the rates will be where money is borrowed from. Banks will borrow from the Fed if the DR they charge is lower than the FFR the other banks are charging, and vice versa...
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