The Appropriate Open Market Operation for Reducing the Money Supply

question 197

Multiple Choice

The appropriate open market operation for reducing the money supply is

• A)buying U.S.government securities
• B)limiting the amount loaned to banks
• C)buying up Federal Reserve notes
• D)selling U.S.government securities
• E)increasing the reserve requirement

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Definitions:

Rescission

The process of unwinding a transaction, returning all parties to their pre-contractual state.

Fraud

The intentional deception or misrepresentation made by a person or entity to gain an unfair advantage or harm another party.

Misrepresentation

The act of giving false or misleading information about a material fact, which can lead another person to act to their detriment or alter their position.

Scienter

Knowledge of wrongdoing or fraudulent intent in legal contexts, essential for establishing liability in some cases.