If the Fed Wanted to Use All Three of Its

question 1

Multiple Choice

If the Fed wanted to use all three of its major monetary control tools to decrease the money supply, it would:

• A) buy bonds, reduce the discount rate, and reduce reserve requirements.
• B) sell bonds, reduce the discount rate, and reduce reserve requirements.
• C) sell bonds, increase the discount rate, and increase reserve requirements.
• D) buy bonds, increase the discount rate, and increase reserve requirements.

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Definitions:

Self-Regulated System-2

Refers to the conscious, reflective, and deliberative aspect of cognition controlling thoughts, emotions, and actions.

Anchoring with Adjustment

A cognitive bias where initial information serves as an anchor and subsequent decisions are adjusted around this anchor, though often not enough.

Expression

The process of making known one's thoughts or feelings through words, gestures, or artistic mediums.

Influence

The capacity or power of individuals or things to be a compelling force on the actions, behavior, opinions, or development of others.