It Is Necessary for the Federal Reserve to Regulate the Money

question 51

Multiple Choice

It is necessary for the Federal Reserve to regulate the money supply because

• A)banks tend to act in a counter-cyclical manner with regard to the money supply.
• B)banks are not profit oriented and tend to be unresponsive to the needs of business.
• C)left to itself, the banking system will create a gyrating money supply that will be destabilizing.
• D)left to itself, the banking system will not be able to increase or decrease the money supply.

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