If the Fed Wants to Reduce Bank Reserves,it Can

question 143

Multiple Choice

If the Fed wants to reduce bank reserves,it can:

• A) Raise the discount rate or buy bonds on the open market.
• B) Reduce the minimum reserve ratio or sell bonds on the open market.
• C) Raise the discount rate or sell bonds on the open market.
• D) Decrease the minimum reserve ratio or reduce the discount rate.

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Definitions:

Vector

A line having a specific length and direction.

Magnitude

A numerical value assigned to the size or amount of a physical quantity (such as force, mass, or electric current) without regard to its direction.

Direction

A course along which someone or something moves.

Right Triangle

A triangle that contains a right angle.