Which of the Following Describes How the Federal Reserve Could

question 34

Multiple Choice

Which of the following describes how the Federal Reserve could use the tools of monetary policy to increase the money supply?

• A) Reduce the reserve requirement, reduce the discount rate, or buy bonds.
• B) Raise the interest rate banks receive from the Fed, increase the discount rate, or sell bonds.
• C) Increase the reserve requirement, increase the discount rate, or sell bonds.
• D) Increase the reserve requirement, reduce the discount rate, or reduce the interest rate that banks receive from the Fed.

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Definitions:

Policy Advisers

Experts who provide analysis and recommendations on public policy issues to policymakers.

Belief System

A set of principles or tenets which together form a basis of faith, morality, or other system of ideas guiding an individual or community.

Zero Coordinate

A point in a coordinate system where both the x-axis and y-axis values are zero, representing the origin.

Origin

The starting point or initial position in a coordinate system or mathematical equation.