If the Fed Wants to Decrease the Quantity of Money

question 136

Multiple Choice

If the Fed wants to decrease the quantity of money, it can

• A) purchase U.S. government securities.
• B) raise income tax rates.
• C) decrease the government budget deficit.
• D) sell U.S. government securities.

---

Definitions:

Group Polarization

The tendency for a group to make decisions that are more extreme than the initial inclination of its members, either more conservative or riskier.

Risky Shift

The phenomenon where groups make riskier decisions than individuals would.

Group Norms

Unwritten rules or expectations within a group that dictate the behaviors, values, and attitudes of its members.

Social Reality

The shared beliefs, practices, norms, and values that are constructed by society and perceived as real and valid by its members.