If the Fed chooses to sell bonds on the open market, it is attempting to:
a) lower interest rates using expansionary monetary policy.
b) lower interest rates using contractionary monetary policy.
c) raise interest rates using expansionary monetary policy.
d) raise interest rates using contractionary monetary policy.
Ans: d) raise interest rates using contractionary monetary policy.
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Which of the following is an objective of macroeconomic stabilization?
(a) eliminating current account deficits. (b) controlling inflation. (c) restoring fiscal balance. (d) all of the above.
Imagine a crude banking system based on a reserve of 100 gold coins, with circulating paper deposit claims on 500 gold coins
This situation is sustainable if, among other things, merchants ________ accept paper claims on gold as payment for their goods, and gold coins withdrawn from the banking system are ________ the system. A) will, returned to B) will, kept out of C) will not, returned to D) will not, kept out of