If the Economy Is Inflationary, the Fed Would Most Likely

question 224

Multiple Choice

If the economy is inflationary, the Fed would most likely:

• A) increase bank reserves by raising the discount rate.
• B) increase bank reserves by buying government securities
• C) decrease bank reserves by lowering the discount rate.
• D) decrease bank reserves by selling government securities.
• E) decrease bank reserves by lowering the legal reserve requirement.

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