Which of the Following Would Lead to a Rapid Growth

question 166

Multiple Choice

Which of the following would lead to a rapid growth of the money supply in the future?

• A)the use of large excess reserves by banks to extend additional loans
• B)a reduction in government expenditures to reduce the size of the federal deficit
• C)an increase in government expenditures financed by taxes
• D)an increase in the interest rate the Fed pays banks holding excess reserves