If the Fed was trying to reduce demand-pull inflation, it might
If the Fed was trying to reduce demand-pull inflation, it might
A. sell government securities, lower reserve requirements and lower the discount rate.
B. sell government securities, raise reserve requirements and raise the discount rate.
C. sell government securities, lower reserve requirements and raise the discount rate.
D. buy government securities, lower reserve requirements and raise the discount rate.
Homework Answers
B) sell government securities, raise reserve requirements and raise the discount rate.
All three instruments decreases aggregate supply and shifts aggregate supply curve leftwards causing decrease in demand pull inflation.
Reserve requirement is the minimum amount of deposits which each bank is required to keep with central bank. Increase in reserve requirement means less money is left by the banks to provide loans.
Discount rate is the rate of interest charged by the one bank from another for loans overnight. Increase in discount rate decreases lending of banks and thus reduces money supply.
If severe demand-pull inflation was occurring in the economy, proper government policies would involve a government:...
If severe demand-pull inflation was occurring in the economy, proper government policies would involve a government: 1) deficit, the purchase of securities in the open market, a higher discount rate, and higher reserve requirements. 2) deficit, the sale of securities in the open market, a higher discount rate, and lower reserve requirements. 3) surplus, the sale of securities in the open market, a higher discount rate, and higher reserve requirements. 4) surplus, the purchase of securities in the open market,...
If the Fed wanted to reduce the federal funds interest rate, it might:
If the Fed wanted to reduce the federal funds interest rate, it might: A. increase the discount rate. B. increase the required reserve ratio. C. buy government securities. D.sell government securities. E. do any of the above except c.
The government can reduce inflation with the help of both fiscal and monetary policy.
The government can reduce inflation with the help of both fiscal and monetary policy. An effective combination of these policies to reduce inflation would be to _______ and _______ Increase taxes; lower the reserve requirement ratio Increase taxes; sell government bonds Decrease taxes; buy government bonds Decrease government spending; lower discount rate
IS-LM What combination of policies would best reduce inflation? a) Increase taxes, sell government bonds b)...
IS-LM What combination of policies would best reduce inflation? a) Increase taxes, sell government bonds b) Decrease taxes, buy government bonds c) Decrease taxes, lower the reserve ratio d) Decrease government spending, lower the discount rate e) Increase government spending, raise the discount rate Use the IS-LM model. Your policy instruments are: Taxes, Government Spending, and the Money Supply. Describe a policy or set of policies that achieve the following objectives. Your answer should include a diagram to show how...
1) If the Fed believes that the U.S. economy is overheated and in danger of unacceptably...
1) If the Fed believes that the U.S. economy is overheated and in danger of unacceptably high rates of price inflation, it will most likely Select one: A. lower the Federal Reserve discount rate of lending. B. sell U.S. Treasury securities from its own portfolio. C. decrease the legal reserve ratio for member banks. D. buy U.S. Treasury securities from bond dealers.
Is this correct? Answers B sell government securtes, raise reserve requirements and raise the discount rate...
Is this correct?
Answers B sell government securtes, raise reserve requirements and raise the discount rate and raise the discount rate D buy government securities, lower reserve requirements and raise the discount rate Question 15 0 out of 1 points can extend? Selected Answer D$200,000 A $2000 18.000 c $20,000 D $200.000 Wednesday, January 16, 2019 12 04 27 AM EST 40 1213AM 1/16/2079 e to search 8 9
If the Fed wishes to decrease (tighten) the money supply, it should: Group of answer choices...
If the Fed wishes to decrease (tighten) the money supply, it should: Group of answer choices buy Treasury securities in the open market lower the reserve requirements raise the discount rate
Suppose the Fed wanted to engage in an expansionary monetary policy. Which of the following should...
Suppose the Fed wanted to engage in an expansionary monetary policy. Which of the following should it do? a. Increase the reserve requirement ratio. b. Buy bonds on the open market. c. Sell bonds on the open market. d. Lower taxes. e. Increase the discount rate. The interest rate at which banks can borrow funds from the Fed is known as… a. the federal funds rate. b. the discount rate. c. the prime rate. d. the real interest rate. e....
8. When the Fed provides funds to troubled banks that cannot find any other sources of...
8. When the Fed provides funds to troubled banks that cannot find any other sources of funds, it is acting as O A. the lender of last resort. OB. the bureau de change. O c. the Federal Deposit Insurance Corporation. OD. the interbank clearinghouse. 9. Suppose in the Republic of Sasquatch that the regulation of banking rested with the Sasquatchian Congress, including the determination of the reserve ratio. The Central Bank of Sasquatch is charged with regulating the money supply...
Which one of these policies should the Fed engage in if unemployment is 9% and inflation...
Which one of these policies should the Fed engage in if unemployment is 9% and inflation is 1.5%? Select one: a. Issue new government bonds and increase government borrowing b. Sell government bonds through an Open Market Operation c. Increase discretionary government spending d. Raise the Required Reserves Ratio e. Target a lower Federal Funds Rate
If severe demand-pull inflation was occurring in the economy, proper government policies would involve a government: 1) deficit, the purchase of securities in the open market, a higher discount rate, and higher reserve requirements. 2) deficit, the sale of securities in the open market, a higher discount rate, and lower reserve requirements. 3) surplus, the sale of securities in the open market, a higher discount rate, and higher reserve requirements. 4) surplus, the purchase of securities in the open market,...
IS-LM What combination of policies would best reduce inflation? a) Increase taxes, sell government bonds b) Decrease taxes, buy government bonds c) Decrease taxes, lower the reserve ratio d) Decrease government spending, lower the discount rate e) Increase government spending, raise the discount rate Use the IS-LM model. Your policy instruments are: Taxes, Government Spending, and the Money Supply. Describe a policy or set of policies that achieve the following objectives. Your answer should include a diagram to show how...
Is this correct?
Answers B sell government securtes, raise reserve requirements and raise the discount rate and raise the discount rate D buy government securities, lower reserve requirements and raise the discount rate Question 15 0 out of 1 points can extend? Selected Answer D$200,000 A $2000 18.000 c $20,000 D $200.000 Wednesday, January 16, 2019 12 04 27 AM EST 40 1213AM 1/16/2079 e to search 8 9
8. When the Fed provides funds to troubled banks that cannot find any other sources of funds, it is acting as O A. the lender of last resort. OB. the bureau de change. O c. the Federal Deposit Insurance Corporation. OD. the interbank clearinghouse. 9. Suppose in the Republic of Sasquatch that the regulation of banking rested with the Sasquatchian Congress, including the determination of the reserve ratio. The Central Bank of Sasquatch is charged with regulating the money supply...
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