If the Fed wanted to use all three of its major monetary control tools to decrease the money supply, it would:
a. buy bonds, reduce the discount rate, and reduce reserve requirements.
b. sell bonds, reduce the discount rate, and reduce reserve requirements.
c. sell bonds, increase the discount rate, and increase reserve requirements.
d. buy bonds, increase the discount rate, and increase reserve requirements.
c
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Assume that the Cambridge k = .20. If income is equal to $100,000, the transactions demand for money is equal to
A) $20,000. B) $50,000. C) $100,000. D) $500,000.
Referring to Figure 4.1, the increase in output from point B to C is greater than the increase in output from point C to D becauseĀ
A. better workers are usually hired after the earlier ones. B. more workers always produce more. C. eventually workers are up against the fact that there are fixed inputs and more workers do not add as much. D. a small number of workers cannot take as good advantage of the division of labor as a larger number.