![]() Purchases of government bonds from banks. Which of the following actions by the Fed would cause the money supply to increase? A. raise interest rates and restrict the availability of bank credit. The purpose of a restrictive monetary policy is to: A. lowers both the interest rate and aggregate demand. lowers the interest rate and increases aggregate demand. ![]() increases both the interest rate and aggregate demand. When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down. increases the interest rate and decreases aggregate demand. D sell government securities, raise reserve requirements, lower the discount rate, and increase the interest - paid on reserves held at the Fed banks. Csell government securities, lower reserve requirements, lower the discount rate, and increase the interest - paid on reserves held at the Fed banks. When the Fed first intervened in September 2019, it offered at. interest paid on reserves held at the Fed banks. The Fed can take direct action to keep the funds rate in its target range by offering its own repo trades at the Fed’s target rate. B buy government securities, raise reserve requirements, raise the discount rate, and reduce the amount of.
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