. The fractional reserve banking system in the U.S. is based on the practices of
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Question
. The fractional reserve banking system in the U.S. is based on the practices of a the goldsmiths. b. the federal reserve system c. the latest world banking regulations. d. currency speculators. 2. 3. Expansionary monetary policy operates initially by a. increasing aggregate supply b. decreasing the inflation rate c. increasing investment and thereby increasing aggregate demand d. all of the above 4. An easy money policy would include the Fed: a. increasing the discount rate b. increasing the reserve requirement c. buying bonds. d. all of the above. e. none of the above. 5. A tight money policy would include the Fed: a. decreasing the discount rate b. increasing the reserve requirement c. buying bonds d. all of the above e. none of the above 6. The speculative demand for money Is a function of: a. consumer incomes.Explanation / Answer
2. a. Goldsmiths
3. d. All of the above.
4. c. buying bonds. The other two policies can have drastic effects on the economy.
5. b. increasing the reserve requirements.
7. a. consumer incomes
8. c. the buying and selling of bonds
9. e. equivalent to pushing on a string
10. a. monetary policy is supposedly independent of political influences.
11. c. $400
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