If the Fed Wanted to Shift to a Restrictive Monetary

question 185

Multiple Choice

If the Fed wanted to shift to a restrictive monetary policy and reduce the money supply, it could

• A) decrease the reserve requirements imposed on commercial banks.
• B) purchase U.S. government securities and other financial assets in the open market.
• C) decrease the interest rate on loans extended to banks and other financial institutions.
• D) increase the interest rate paid on excess reserves encouraging banks to hold excess reserves rather than extend more loans.

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Definitions:

Transformational Style

A leadership approach that encourages change and innovation through inspiration and motivation.

Situational Contingency

A concept in management stating that the effectiveness of a decision or approach depends on the specific circumstances or situation at hand.

Servant Leadership

A leadership philosophy which emphasizes the leader's key role as serving the needs of others, prioritizing the well-being and development of team members.

Leadership Styles

The various approaches to leadership that management may use to interact with employees, make decisions, and motivate people, including autocratic, democratic, transformational, and laissez-faire styles.