1. The money supply increase when the fed a) lowers the discount rate. The incre
ID: 1114662 • Letter: 1
Question
1. The money supply increase when the fed
a) lowers the discount rate. The increase will be larger the smaller the reserve ratio.
b)lowers the discount rate. The increase will be larger the larger the reserve ratio.
c) raise the discount rate. The increase will be larger the smaller the reserve ratio.
d) raises the discount rate. The increase will be larger the larger the reserve ratio is.
2)Which of the following is not always a voting member of the FOMC?
a)the president of the New York Federal Reserve District
b) the chairman of the Board of Governors
c)a member of the Board of Governors other than the chair
d) the president of the Boston Federal Reserve District Bank
Explanation / Answer
1. The right answer is option a. lowers the discount rate. The increase will be larger the smaller the reserve ratio.
Explanation: The discount rate is the rate at which the US Fed lends to commercial banks. When the discount rate is reduced, banks lend more from Fed and money supply is increased. The lower the reserve ratio, the larger will be the result.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.