To reduce the money supply, the Federal Rerserve Bank could: Question 4 options:

ID: 1197148 • Letter: T

Question

To reduce the money supply, the Federal Rerserve Bank could:

Question 4 options:

decrease the reserve requirement.

decrease the discount rate.

increase the discount rate.

buy bonds.

Based on the Aggregate Supply/Aggregate Demand model, a contractionary monetary policy:

Question 5 options:

increases interest rates, raises investment, and increases income.

decreases interest rates, raises investment, and increases income.

increases interest rates, reduces investment, and decreases income.

decreases interest rates, reduces investment, and decreases income.

When the Federal Reserve Bank buys bonds, the Federal Reserve Bank:

Question 6 options:

reduces the reserves and the federal funds rate increases.

increases the reserves and the federal funds rate decreases.

reduces the reserves and the federal funds rate decreases.

increases the reserves and the federal funds rate increases.

decrease the reserve requirement.

decrease the discount rate.

increase the discount rate.

buy bonds.

ans 4

c) increase the discount rate.

ans 5

c) increases interest rates, reduces investment, and decreases income.

ans 6

c) reduces the reserves and the federal funds rate decreases.

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