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Explain How Each of the Following Changes the Money Supply

question 6

Essay

Explain how each of the following changes the money supply.
a.the Fed buys bonds
b.the Fed auctions credit
c.the Fed raises the discount rate
d.the Fed raises the reserve requirement


Definitions:

Factor 2

A component or element that contributes to a particular result or situation.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Marginal Product

Marginal product is the additional output resulting from the use of one more unit of a variable input, holding other inputs constant.

Fertilizer

Substances used to supply essential nutrients to plants, aiming to enhance growth, yields, and quality of agricultural produce.

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