An Example of a Federal Reserve Action That Increases the Money

question 157

Multiple Choice

An example of a Federal Reserve action that increases the money supply is:

• A) an increase in the required reserve ratio.
• B) a decrease in the discount rate.
• C) a law placing a ceiling on the maximum interest rate that banks can pay to depositors.
• D) the Fed selling bonds in the open market.

---

Definitions:

Cognitive Development

The process by which individuals acquire and evolve their cognitive abilities, including thinking, problem solving, and decision making, across the lifespan.

Formal Operational

refers to the final stage in Piaget's cognitive development theory, where individuals develop the ability to think abstractly and logically.

Centration

A cognitive limitation in early childhood, where the focus is on one aspect of a situation while ignoring others.

Preoperational

A stage in Piaget's theory of cognitive development, occurring from ages 2 to 7, where children begin to engage in symbolic play and learn to manipulate symbols but do not yet understand concrete logic.