If the Fed Wanted to Use All of Its Policy

question 86

Multiple Choice

If the Fed wanted to use all of its policy variables to decrease the supply of money, which of following would that include?

• A)​Increasing its open market sales of government securities.
• B)​Increasing the required reserve ratio.
• C)​Decreasing the interest rate it pays banks on bank reserves.
• D)​It would include all of the above.

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Definitions:

Year-End Balance Sheet

A financial statement that shows a company's assets, liabilities, and equity at the last day of the fiscal year, providing a snapshot of its financial condition.

Data

Information collected and used for analysis or decision making, often in a structured form.

Common Size Percentages

Ratios used in financial analysis that express each line item on a financial statement as a percent of a base amount, facilitating comparison.

Operating Expenses

Costs incurred in the day-to-day operations of a business, excluding the cost of goods sold, such as rent, utilities, and salaries.