A reduction of the discount rate by the Federal Reserve Banks has the direct effect of
A) making it less costly for commercial banks to borrow from the Fed.
B) making it more costly for the Treasury to finance deficits.
C) increasing commercial bank reserves.
D) increasing the stock of money.
E) doing all of the above.
A
You might also like to view...
The above figure shows a production possibility frontier for a society with two members, Al and Bruce. If point "a" is the efficient product mix, draw a possible Edgeworth box and indifference curves
What will be an ideal response?
Which of the following statements about markets is not true?
a. A market is an impersonal mechanism. b. Markets coordinate the independent decisions of buyers and sellers. c. Markets reduce the transaction costs of exchange. d. More specialized markets are generally found in urban areas. e. All markets provide the same amounts of information.