Which of the Following Is an Appropriate Monetary Policy If

question 87

Multiple Choice

Which of the following is an appropriate monetary policy if the Fed wants to increase the money supply?

• A) an increase in the required reserve ratio
• B) an increase in the discount rate
• C) purchases of bonds in open market operations
• D) an increase in taxes on interest income

---

Definitions:

Perfect Complements

Goods that are used together in fixed proportions, where the consumption or utility of one good directly impacts the effectiveness or utility of the other.

Indifference Curves

Graphical representations in microeconomics showing all combinations of goods that provide equal satisfaction to a consumer.

Gloves

Hand-worn garments intended to protect the hands from various conditions such as cold, heat, damage, or contamination.

Optimal Choice Point

In decision theory and economics, the point at which the decision maker achieves the best possible outcome under given constraints.