Prior to 2008, the Primary Tool Used by the Fed

question 139

Multiple Choice

Prior to 2008, the primary tool used by the Fed to control the money supply was

• A) the manipulation of the required reserve ratio banks must hold against their checking deposits.
• B) the extension of loans to financial institutions.
• C) the buying and selling of stocks and corporate bonds.
• D) the buying and selling of U.S. Treasury securities.

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Definitions:

Acceptance

The act of agreeing to receive or undertake something offered.

Notification

The act of formally informing or giving notice to a party or authority about an event, action, or proceeding.

Automatically Terminate

The ending of an agreement, contract, or employment without the need for action by either party, often triggered by predetermined conditions.

Contractual Capacity

The legal ability of an individual or entity to enter into a contract, requiring an understanding of the terms and the ability to comprehend its obligations.