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:

Synergy Value

The additional value created by combining two companies, expected to result from efficiencies, shared technologies, or market capabilities.

Stock-Financed Deal

A transaction, often in mergers and acquisitions, where payment is made in the form of the acquiring company's stock.

Incremental Value

The additional or excess value that an activity, project, or entity generates compared to a baseline scenario.

Shares Outstanding

The total number of shares of a company that are currently owned by investors, including restricted shares.