If the Federal Reserve Wants to Lower the Monetary Base

question 68

Multiple Choice

If the Federal Reserve wants to lower the monetary base and the money supply,it will

• A) increase bank reserves.
• B) lower the discount rate.
• C) sell government securities.
• D) lower reserve requirements.

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Definitions:

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing to buy at different prices.

Profit-maximizing

A strategy or approach aimed at achieving the highest possible profit from business operations.

Nondiscriminating Monopolist

A monopolist that charges all consumers the same price for its product, regardless of the market segment or consumer willingness to pay.

Marginal Revenue

The additional income earned from selling one more unit of a good or service.