Figure 11-1

question 6

Multiple Choice

Figure 11-1
-Refer to Figure 11-1. If the Fed wants to achieve the results shown in Panel (a) , it should

• A) raise the discount rate.
• B) increase reserve requirements.
• C) sell government bonds in the open market.
• D) buy government bonds in the open market.

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Definitions:

Endorser

An individual or entity that signs and backs a document, often a negotiable instrument, indicating their support and assurance.

Special Endorsement

An endorsement on a negotiable instrument, such as a check, specifying the person to whom or the entity to which the instrument is to be paid.

Promissory Note

A promise in writing, signed by the maker, to pay a sum certain in money to the person named therein, or bearer, at some fixed or determinable future time, or on demand.