Explain How Each of the Following Policy Actions by the Federal

question 40

Essay

Explain how each of the following policy actions by the Federal Reserve would affect the quantity of money supplied:
(a) a decrease in the required reserve ratio
(b) an increase in the discount rate
(c) the Fed purchases government bonds from the public

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Definitions:

Regressive

In economics, describes a situation or policy that disproportionately affects those with lower incomes or wealth, often referring to certain tax systems.

Progressive

Relates to a context where something increases or develops in stages incrementally.

Federal Taxes

Taxes collected by the federal government, involving income tax, payroll taxes, and various other taxes.

State And Local Taxes

Various forms of taxation imposed by state, regional, and local governments, including income, sales, property, and other taxes.