To Offset the Effect of Households and Firms Deciding to Hold

question 38

Multiple Choice

To offset the effect of households and firms deciding to hold less of their money in checking account deposits and more in currency,the Federal Reserve could

• A)raise the required reserve ratio.
• B)buy Treasury securities.
• C)raise the discount rate.
• D)lower bank taxes.

---

Definitions:

Cheilosis

A condition characterized by the cracking and inflammation of the lips, often due to vitamin B deficiency or fungal infection.

Gag Reflex

A reflex contraction of the back of the throat, evoked by touching the soft palate, designed to prevent choking and aspiration of foreign objects.

Albumin Level

The concentration of albumin (a main protein in blood plasma) in the blood, indicative of nutritional status and liver function.

Severe Dehydration

A dangerous level of fluid loss that impairs the body’s ability to perform important functions, potentially leading to serious health issues or death.