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Explain Two Ways by Which the Federal Reserve System Can

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Essay

Explain two ways by which the Federal Reserve System can increase the monetary base. Why is the effect of Federal Reserve actions on bank reserves less exact than the effect on the monetary base?


Definitions:

Compound

A substance made up of two or more different elements chemically combined in fixed proportions.

Elements

Pure chemical substances consisting of a single type of atom, distinguished by their atomic number, which is the number of protons in their atomic nuclei.

Gold Foil Experiment

An experiment conducted by Ernest Rutherford which demonstrated that the atom has a tiny, dense nucleus by observing the deflection of alpha particles.

Rutherford

A term often referencing Ernest Rutherford, a physicist known for his discoveries in the field of nuclear physics and for the Rutherford model of the atom.

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