Which of the Following Fed Actions Will Decrease the Money

question 151

Multiple Choice

Which of the following Fed actions will decrease the money supply?

• A) reverse repos
• B) repos
• C) open-market purchases of bonds
• D) raising taxes

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Definitions:

Risky Investment

An investment with a high degree of risk that could lead to the loss of the principal amount but also offers potentially high returns.

Proportionate Ownership

The percentage of ownership that an investor holds in a company, typically represented in terms of share ownership.

Preemptive Rights

The rights that allow existing shareholders to purchase additional shares before new shareholders can buy them, in order to maintain their proportionate ownership in the company.

Cumulative

Cumulative refers to the total amount accumulated over a series of periods, often used in the context of dividends or other accumulative data.