The Fed Has Opted to Buy Securities and Lower the Reserve

question 99

Multiple Choice

The Fed has opted to buy securities and lower the reserve requirement. What will most likely happen as a result of this course of action?

• A) The money supply will increase thereby stimulating the economy.
• B) The money supply will increase thereby reducing inflation.
• C) The money supply will increase thereby causing disinflation.
• D) The money supply will decrease thereby reducing the possibility of a recession.
• E) The money supply will decrease thereby reducing deflation.

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Definitions:

Compulsory Participation

A situation or policy where individuals are required by law or rule to engage in a particular activity, such as voting or military service.

Census

An official count or survey of a population, typically recording various details of individuals, such as age, sex, occupation, and nationality.

Representative Sample

A representative sample is a subset of a population that accurately reflects the members of the entire population, used in statistical analysis to make inferences about the population.

Experimental Method

A research methodology that involves manipulating variables to test hypotheses and observe effects.