After a FOMC meeting, the Federal Reserve Bank concludes that they need to increase the monetary...

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After a FOMC meeting, the Federal Reserve Bank concludes that they need to increase the monetary...

After a FOMC meeting, the Federal Reserve Bank concludes that they need to increase the monetary base by $120 million. In this case, the Fed can accomplish this goal by

Group of answer choices

A) purchasing less than $120 million in securities

B) purchasing exactly $120 million worth of securities

C) selling exactly $120 million worth of securities

D) selling less than $120 million worth of securities

business economics

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Answer 1

Answer #1

Fed can increase their monetary base by buying securities worth less than 120 million,because the money multiplier increase the monetary base by multiplier times the rise in money supply.

Answer-A

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Answer 2

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