If the Federal Reserve System Wanted to Increase the Money

question 31

Multiple Choice

If the Federal Reserve System wanted to increase the money supply,it would most likely take which action first?

• A) Raise the reserve requirement
• B) Buy securities on the open market
• C) Print more money
• D) Lower the discount rate
• E) Reduce credit controls

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Definitions:

American-Style Options

Options contracts that can be exercised at any time up to the expiration date, providing more flexibility than European-style options.

Maturities

The set dates at which a bond or other financial instrument's principal amount is due to be paid back to the investor.

LEAPS

Long-Term Equity Anticipation Securities, which are options contracts with expiration dates longer than one year, offering longer-term investment strategies.

Initial Maturities

The original duration until the expiration or due date of a financial instrument, such as a bond or loan, when first issued.