-19. If the Fed wanted to increase the money supply, it would make open market a

Question

-19. If the Fed wanted to increase the money supply, it would make open market a. purchases and lower the discount rate b. sales and lower the discount rate. c. purchases and raise the discount rate. d. sales and raise the discount rate. To decrease the money supply, the Fed could 20. a. sell government bonds. b. increase the discount rate. increase the reserve requirement. All of the above are correct. c. d. When the Fed decreases the discount rate, banks will a. b. c. d. 21. borrow more from the Fed and lend more to the public. The money supply increases. borrow more from the Fed and lend less to the public. The money supply decreases. borrow less from the Fed and lend more to the public. The money supply increases. borrow less from the Fed and lend less to the public. The money supply decreases. e/False cate whether the sentence or statement is true or false. 22. Unemployment due to job search is best classified as structural unemployment.

Explanation / Answer

19. A) purchases and lowers the discount rate

The banks should purchase government bonds to increase the money supply and decrease the discount rate facilitating the banks to borrow money which will create the scope for loans to be lent out.

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