If the Economy Is in an Inflationary Boom, the Fed

question 164

Multiple Choice

If the economy is in an inflationary boom, the Fed would most likely

• A) encourage banks to provide loans by buying government securities.
• B) encourage banks to provide loans by raising the discount rate.
• C) encourage banks to provide loans by selling government securities.
• D) restrict bank lending by selling government securities.
• E) restrict bank lending by lowering the federal funds rate.

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