The Fed Increases the Reserve Requirement,but It Wants to Offset

question 93

Multiple Choice

The Fed increases the reserve requirement,but it wants to offset the effects on the money supply.Which of the following should it do?

• A)sell bonds to increase reserves
• B)sell bonds to decrease reserves
• C)buy bonds to increase reserves
• D)buy bonds to decrease reserves

---

Definitions:

Physical Substance

The tangible, material aspect of an asset, referring to its physical existence and properties.

Rental

A payment made periodically by a lessee to a lessor for the use of a property, facility, equipment, or service.

Economic Benefits

Refers to the advantageous outcomes derived from various financial activities, including increased income, higher productivity, or enhanced value of assets.