Refer to the table. Suppose the legal reserve requirement is 10 percent and initially there are no excess reserves in the banking system. If the Fed wished to reduce the interest rate by 1 percentage point, it would:
A. sell $10 of government bonds in the open market.
B. buy $100 of government bonds in the open market.
C. sell $100 of government bonds in the open market.
D. buy $10 of government bonds in the open market.
D. buy $10 of government bonds in the open market.
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As the baby boomer generation retires and takes money out of their retirement accounts, what is expected to happen to the interest rate, ceteris paribus?
A) It will increase. B) It will not change. C) It will decrease. D) It will decrease because of demand-side shocks.
Which of the following sets of preferences satisfies the property of transitivity?
a. Cookies are preferred to pie. Pie is preferred to brownies. Cookies are preferred to brownies. b. Cookies are preferred to pie. Brownies are preferred to pie. Pie is preferred to cookies. c. Cookies are preferred to ice cream. Ice cream is preferred to brownies. Brownies are preferred to cookies. d. Cookies are preferred to pie. Ice cream is preferred to cookies. Pie is preferred to ice cream.