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

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Definitions:

Broad

Wide in extent or scope; encompassing a large area or range.

Comprehensive

Thorough and complete in coverage or scope, addressing all necessary aspects of a topic or issue.

Longer-Term

Pertaining to an extended period, typically beyond five years, used especially in planning and forecasting future goals and strategies.

Control

The process of managing and directing activities in an organization to ensure that its goals are achieved efficiently and effectively.