When the reserve guard increases the interest rates who get the extra amount..The bank?? or the reserve hill?
Answers:
It is not a simple answer. The Fed increases the interest rate to slow down the cutback, cut liquidity, and prevent inflation. It make it more expensive for bank to borrow money, so within turn bank increase the interest rate at which they lend money. This cause borrowers to slow down their constraint for funds, which mode that in that will be smaller quantity buying of wealth investments such as equipment and buildings.
So it is not a event of getting an extra amount of interest. The Fed get the interest on loans made to bank. The bank obtain the interest on loans made to businesses and individuals. Investors take a complex rate of interest on their bond investments. Interest rate change by the Fed are made for the purpose of managing the reduction, not to earn more money.