The Figure Given Below Shows Equilibrium in a Money Market

question 78

Multiple Choice

The figure given below shows equilibrium in a money market. If S is the initial supply curve, the movement from S to S* can be attributed to:

• A) a decrease in the required reserve ratio.
• B) the purchase of U.S. Treasury securities by the Fed.
• C) the sale of U.S. Treasury securities by the Fed.
• D) a decrease in the discount rate.
• E) a decrease in excess reserves in the banking system.

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Definitions:

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