If the Federal Reserve Authorities Were Attempting to Reduce Demand-Pull

question 34

Multiple Choice

If the Federal Reserve authorities were attempting to reduce demand-pull inflation,the proper policies would be to:

• A) sell government securities,raise reserve requirements,raise the discount rate,and increase the interest paid on reserves held at the Fed banks.
• B) buy government securities,raise reserve requirements,raise the discount rate,and reduce the amount of interest paid on reserves held at the Fed banks.
• C) sell government securities,lower reserve requirements,lower the discount rate,and increase the interest paid on reserves held at the Fed banks.
• D) sell government securities,raise reserve requirements,lower the discount rate,and increase the interest paid on reserves held at the Fed banks.

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