The Federal Reserve may choose to monetize the debt in order to
a. reduce the burden of the national debt.
b. shift the supply curve of money outward.
c. shift the demand curve for money inward.
d. reduce the volume of reserves in commercial banks.
b
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If you exchanged $1,000 for 90,000 yen at your local bank in preparation for an upcoming trip to Tokyo, and notice after your arrival that the current exchange rate is 100 yen per dollar, how will the value of the yen you brought to Tokyo change relative to the dollar?
a) The value of the yen fell in value relative to the dollar. b) The value of the yen rose in value relative to the dollar. c) The value of the yen stayed the same relative to the dollar. d) There is not enough information to answer this question.
The Fed can decrease money supply by
a. buying government bonds. b. increasing the reserve requirement. c. printing less currency. d. making open market purchases. e. decreasing the discount rate.