If the Fed Wants to Increase the Quantity of Money

question 124

Multiple Choice

If the Fed wants to increase the quantity of money, it can

• A) lower income tax rates.
• B) purchase U.S. government securities.
• C) increase the government budget deficit.
• D) raise the exchange rate.

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Definitions:

Mortgage

A legal agreement by which a bank or other creditor lends money at interest in exchange for taking the title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Investment Earnings

The return or income generated from various forms of investments, such as stocks, bonds, or real estate.

Present Value

A financial concept that calculates the current value of a future sum of money or stream of cash flows, given a specific rate of return.