To Increase the Quantity of Money in the Economy, the Federal

question 229

Multiple Choice

To increase the quantity of money in the economy, the Federal Reserve is likely to

• A) print more money and give it to the banks.
• B) lower tax rates.
• C) sell government securities in an open market operation.
• D) buy government securities in an open market operation.

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Definitions:

Matured

Used to describe financial instruments or investments that have reached their due date for payment or realization.

Investment

Allocation of resources, usually money, with the expectation of generating an income or profit.

Income Tax Overpayment

A situation where an individual or entity has paid more income tax to the government than was actually owed.

Canada Revenue Agency

The federal agency responsible for administering tax laws and various social and economic benefit and incentive programs delivered through the tax system for the Government of Canada.