To Reduce the Money Supply in the Economy, the Fed

question 153

Multiple Choice

To reduce the money supply in the economy, the Fed would

• A) increase the discount rate and/or raise the reserve ratio.
• B) carry out open market purchases and/or raise the reserve ratio.
• C) carry out open market sales and/or lower the discount rate.
• D) carry out open market purchases and/or lower the discount rate.

Outline the process for organizing direct claim messages.

Understand why direct order is preferred for good-news and neutral messages.

Recognize the various types and purposes of internal operational messages.

Be able to draft messages that adjust to policy changes effectively.

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Definitions:

Total Production

The total output of goods or services produced by an individual firm or an entire industry over a specific period.

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity (such as production of a good or service) more efficiently than another activity.

Opportunity Cost

The loss experienced from bypassing the following superior alternative in the course of decision-making.

Capital

Refers to financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the tangible machinery and production equipment used in environments such as factories.