Which of the Following Describes How the Federal Reserve Could

question 46

Multiple Choice

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

• A) Increase the reserve requirement, increase the discount rate, and sell bonds.
• B) Increase the interest rate that the Federal Reserve pays on bank deposits, increase the discount rate, and buy bonds.
• C) Decrease the reserve requirement, increase the discount rate, and sell bonds.
• D) Decrease the reserve requirement, decrease the discount rate, and decrease the interest rate that the Fed pays on bank deposits.

---

Definitions:

War Preparation

The activities and measures taken by a nation or group to ready itself for potential military conflict.

Massachusetts Citizens

Residents or naturalized individuals living in the state of Massachusetts, often referring to their rights, responsibilities, and historical role in American history.

Battle Of Bunker Hill

An early and significant battle in the American Revolutionary War, fought on June 17, 1775, on the outskirts of Boston, Massachusetts, which demonstrated the resilience and fighting spirit of the American forces.