Which of the following is likely to be true if the Fed buys government bonds held by the U.S. commercial banks?
a. Banks will reduce the amount of loans, and this will increase the money supply in the economy.
b. Banks will give more loans, and this will increase the money supply in the economy
c. Banks will give more loans, and this will decrease the money supply in the economy.
d. Banks will reduce the amount of loans, and this will decrease the money supply in the economy.
b
Economics
You might also like to view...
Everything else held constant, when output is ________ the natural rate level, wages will begin to ________, increasing short-run aggregate supply
A) above; fall B) above; rise C) below; fall D) below; rise
Economics
Government intervention may achieve a more optimal outcome than the market mechanism when addressing
A. Consumption of cigarettes. B. Inefficient bureaucracy. C. The supply of new hot dog stands. D. None of the choices are correct.
Economics