When the Federal Reserve System Wants to Increase the Money

question 175

Multiple Choice

When the Federal Reserve System wants to increase the money supply,what does it typically do?

• A)It purchases U.S.government securities.
• B)It increases the discount rate.
• C)It increases the required reserve ratio.
• D)It sells bonds on the open market.

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Definitions:

BATNA

Stands for Best Alternative To a Negotiated Agreement, which refers to the most advantageous alternative course of action a party can take if negotiations fail and an agreement cannot be reached.

Legally Binding

Agreements or contracts that are enforceable by law, obliging parties to fulfill their agreed-upon terms under legal jurisdiction.

ZOPA

Stands for Zone of Possible Agreement, which is the range in a negotiation within which an agreement is satisfactory to both parties involved.

Common Ground

Shared interests, beliefs, or knowledge that enable better understanding and communication between people.