If the Fed Wants to Increase the Lending Capacity of the System

question 118

Multiple Choice

If the Fed wants to increase the lending capacity of the system by $60 billion and the reserve requirement is 10 percent,it should

• A)Buy $60 billion in bonds from banks.
• B)Buy $6 billion in bonds from banks.
• C)Sell $60 billion in bonds to the public.
• D)Sell $6 billion in bonds to the public.

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Definitions:

Confirmation

The act of validating or verifying that something is true or accurate, often through official or formal acknowledgment.

Party's Signature

The act of an individual or entity affixing a unique mark, often handwritten, on a document to signify agreement or consent.

Enforceable

A term describing a legal agreement that can be upheld and compelled by law in a court of justice.

Pumpkin Pies

Traditional American dessert pies made from a spiced pumpkin-based custard filling.