If the Fed Wanted to Use All Four of Its

question 105

Multiple Choice

If the Fed wanted to use all four of its major monetary control tools to decrease the money supply, it would

• A) buy bonds, reduce the discount rate, reduce reserve requirements, and reduce the interest rate paid on excess reserves.
• B) sell bonds, reduce the discount rate, reduce reserve requirements, and reduce the interest rate paid on excess reserves.
• C) sell bonds, increase the discount rate, increase reserve requirements, and increase the interest rate paid on excess reserves.
• D) buy bonds, increase the discount rate, increase reserve requirements, and increase the interest rate paid on excess reserves.

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Definitions:

Technological

Pertaining to technology, which involves the application of scientific knowledge for practical purposes, especially in industry.

Imitations

Products or services that closely copy or resemble another's in appearance or function but are not identical.

Misleading Strategies

Marketing or business tactics intended to deceive or lead customers or competitors astray.

Competitive Advantage

Describes a condition or circumstance that puts a company in a favorable or superior business position compared to its competitors, often due to unique resources, capabilities, or strategies.