Which of the Following Can the Fed Do to Change

question 26

Multiple Choice

Which of the following can the Fed do to change the money supply?

• A)change reserves or change the reserve ratio
• B)change reserves but not change the reserve ratio
• C)change the reserve ratio but not change the reserve ratio
• D)neither change reserves nor change the reserve ratio

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Definitions:

Investment Opportunity

A financial investment or venture with the potential for yielding returns, involving the allocation of resources with the expectation of future financial gains.

Return On Investment

A measurement of the profitability of an investment, calculated by dividing net profit by the initial capital cost.

Average Operating Assets

The average value of those assets used for the normal operation of a company over a specific period, often used in return on investment calculations.

Net Operating Income

The total profit of a company after operating expenses are subtracted from gross income.