• 2022-05-31
    Which of the following actions by the Fed would reduce the money supply?
    A: an open-market purchase of government bonds
    B: a reduction in banks’ reserve requirements
    C: an increase in the interest rate paid on reserves
    D: a decrease in the discount rate on Fed lending
  • C

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    • 0

      Which of the following is the monetary policy tools?( ) A: Open market operation B: Interest rate C: Local government financing vehicles D: Money aggregate

    • 1

      The table above gives the quantity of money and money demand schedules. Suppose that the interest rate is equal to 6 percent. The effect of this interest rate in the money market is that A: the money market is in equilibrium. B: people buy bonds and the interest rate falls. C: people sell bonds and the interest rate falls. D: bond prices fall and so the interest rate falls.

    • 2

      10) Which of the following is not an example of expansionary monetary policy? A: . An open-market purchase of securities. B: . A reduction in reserve ratio. C: . A reduction in income tax rates. D: . A reduction in the discount rate.

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      Which of the following is a tightening monetary policy ( ). A: Central bank raises the rediscount rate B: Increase the money supply C: The central bank conducts reverse repo operations on the open market D: Central bank reduces the rediscount rate

    • 4

      Which of the following would not be used by the Fed to influence<br/>interest rates? ( ) A: selling securities. B: buying stocks. C: setting reserve requirements. D: changing the discount rate.