If a Central Bank Wants to Implement a Contractionary Policy

question 57

Multiple Choice

If a central bank wants to implement a contractionary policy that decreases real GDP, it conducts an open market operation by _______ securities.Bank reserves _______ and the supply of loanable funds _______.The quantity of money _______.

• A)selling; decrease; decreases; decreases
• B)purchasing; decrease; decreases; decreases
• C)purchasing; decrease; increases; decreases
• D)purchasing; increase; increases; increases
• E)selling; increase; increases; increases

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