Suppose the Fed Forecasts a Reduction in Excess Reserve Holdings

question 151

Multiple Choice

Suppose the Fed forecasts a reduction in excess reserve holdings by banks.It might offset the effect of this on the money supply by

• A) buying government securities.
• B) lowering the required reserve ratio.
• C) lowering the discount rate.
• D) selling government securities.
• E) a,b,and c

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Definitions:

Benevolents

Individuals who exhibit a disposition to do good and to act with kindness and charity.

Equity Ratio

A financial metric that measures the proportion of a company’s total assets that are financed by shareholders' equity, indicating financial stability.

Frederick Taylor

A mechanical engineer who founded the scientific management movement, emphasizing efficiency, labor productivity, and systematic organization of work.

Management And Labor

The dynamic relationship and interactions between the administrative or executive levels of an organization (management) and the employees or workforce (labor).