Author Question: Which of the following would cause a reduction in M1? A) an increase in the required ratio of ... (Read 9 times)

nenivikky · **on:** Jun 30, 2018

Which of the following would cause a reduction in M1?

A) an increase in the required ratio of reserves to deposits
B) a reduction in the discount rate
C) an open market operation where the Fed sells bonds
D) all of the above
E) none of the above

Question 2

Which of the following statements about Fed management of the money supply is correct?

A) Over the past thirty years, the Fed has always stayed within its pre-announced target rates for growth in M2.
B) The most common tool used by the Fed is a change in the required ratio of reserves to deposits.
C) The rate at which the Fed lends money to banks is called the Federal Funds rate.
D) The Fed must report each week to Congress on the conduct of monetary policy.
E) none of the above