To offset the effect of households and firms deciding to hold less of their money in checking account deposits and more in currency, the Federal Reserve could
A) raise the required reserve ratio.
B) buy Treasury securities.
C) raise the discount rate.
D) lower bank taxes.
Answer: B
Economics
You might also like to view...
The demand for Country X's most important exportable product- electronic goods- is likely to double in the next 5 years. Which of the following is likely to happen in this case?
A) Consumption in Country X will rise. B) Asset prices in Country X will fall. C) Unemployment rate in Country X will rise. D) Investment in Country X will fall.
Economics
If the required reserve ratio (RR) is 20 percent, the simple deposit multiplier is
A) 2. B) 5. C) 10. D) 20.
Economics