If the Fed Wanted to Use All Four of Its

question 105

Multiple Choice

If the Fed wanted to use all four of its major monetary control tools to decrease the money supply, it would

• A) buy bonds, reduce the discount rate, reduce reserve requirements, and reduce the interest rate paid on excess reserves.
• B) sell bonds, reduce the discount rate, reduce reserve requirements, and reduce the interest rate paid on excess reserves.
• C) sell bonds, increase the discount rate, increase reserve requirements, and increase the interest rate paid on excess reserves.
• D) buy bonds, increase the discount rate, increase reserve requirements, and increase the interest rate paid on excess reserves.

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Definitions:

Psychological Constructs

Theoretical concepts used to describe, explain, and assess human behavior and cognitive processes.

Association Cortex

Regions of the cerebral cortex that integrate information from various sensory modalities, involved in complex processes such as thought, perception, and planning.

Syntax

The set of rules, principles, and processes that govern the structure of sentences in any given language.

Visual Area V5

Also known as MT (middle temporal) area, this brain region is primarily involved in processing visual motion.