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:

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Fraud

Deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Standard Deduction

A set amount the IRS allows taxpayers to deduct from their income before income tax is applied, reducing taxable income.

Taxpayer

An individual or entity that is obligated to make payments to municipal or government taxation agencies.