Which of the Following Policy Actions by the Fed Would

question 65

Multiple Choice

Which of the following policy actions by the Fed would cause the money supply to decrease?

• A) An open-market purchase of government securities.
• B) A decrease in required reserve ratios.
• C) An increase in the discount rate.
• D) A decrease in the discount rate.

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Definitions:

Optimal Solution

The most efficient and effective answer to a problem, maximizing or minimizing the desired variables within constraints.

Supply Unused

Resources or products that have not been consumed or utilized within a given period, often leading to inefficiencies or increased costs.

Degeneracy

An occurrence in transportation models in which too few squares or shipping routes are being used, so that tracing a closed path for each unused square becomes impossible.