To Reduce the Effects of Crowding Out Caused by an Increase

question 91

Multiple Choice

To reduce the effects of crowding out caused by an increase in government expenditures,the Federal Reserve could

• A)increase the money supply by buying bonds.
• B)increase the money supply by selling bonds.
• C)decrease the money supply by buying bonds.
• D)increase the money supply by selling bonds

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Definitions:

Book of Original Entry

The first place where financial transactions are recorded, including journals.

Journal Entry

A record in accounting that documents a business transaction, showing the accounts impacted and the amounts debited and credited.

Debit Account

A bookkeeping record that raises the value of an asset or expense, or lowers the value of a liability or equity.

Credit Account

A Credit Account is a type of financial account that records the amounts that are owed by a business to its suppliers or creditors, which are typically settled at a later date.