Which of the Following Actions Taken by the Central Bank

question 75

Multiple Choice

Which of the following actions taken by the central bank would NOT reduce the country's money supply?

• A) Raise the reserve requirement.
• B) Raise the discount rate.
• C) Sell bonds on the open market.
• D) Reduce the interest rate that the Federal Reserve pays banks on their deposits at the Fed.

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Definitions:

Labor Services

The physical and mental efforts that people contribute to the production of goods and services.

Technology Changes

The process of innovation and the adoption of new or improved technologies and systems.

Demand For Labor

The total amount of hours of work that employers are willing to pay for at a given wage rate in the economy.

Marginal Physical Product

The additional output produced by employing one more unit of a specific factor of production, holding all other factors constant.