Lowering the Discount Rate Is a Way to Expand the Money

question 146

Multiple Choice

Lowering the discount rate is a way to expand the money supply because

• A)it encourages banks to borrow from the Fed so they can more easily accommodate their customers' needs for loans
• B)it encourages business customers to borrow directly from the Fed
• C)a lower discount rate reduces the amount of reserves banks are required to keep
• D)a lower discount rate automatically reduces excess reserves
• E)it encourages banks to sell U.S.government securities and increase their cash reserves

---

Definitions:

Communication Capabilities

The range of tools and techniques an organization or individual possesses for effective information exchange.

Service Requests

Formal or informal requests made by customers or users for maintenance, support, or delivery of a service.

Customization

The process of making or altering a product or service according to the individual preferences or specifications of the customer.

Digital Capabilities

The skills and technologies that enable individuals or organizations to leverage digital resources for achieving specific goals.