If the Fed Decides to Engage in an Open Market

question 37

Multiple Choice

If the Fed decides to engage in an open market operation to increase the money supply, what will it do?

• A) Sell Treasury bonds, bills, or notes on the bond market.
• B) Buy Treasury bonds, bills, or notes on the bond market.
• C) Increase the required reserve ratio.
• D) Increase the fed funds rate.

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Definitions:

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High Wage Rates

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