If the actual money multiplier equals the potential money multiplier and if the Fed wishes to reduce the money supply by $1 million when the reserve ratio is 20 percent, then the Fed should
A) sell $200,000 of government securities. B) sell $500,000 of government securities.
C) buy $200,000 of government securities. D) buy $500,000 of government securities.
A
Economics
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The purchase of Treasury securities by the Federal Reserve will, in general
A) not change the money supply. B) decrease the quantity of reserves held by banks. C) increase the quantity of reserves held by banks. D) not change the quantity of reserves held by banks.
Economics
Firms buy and sell the right to pollute: a. under a system of compliance standards
b. under a free market system where there is no government intervention and property rights are not well-defined. c. under a system of transferable pollution permits. d. under a pollution tax system.
Economics