Author Question: In a particular state, many commercial banks struggle to lend money to the borrowers due to lack of ... (Read 56 times)

elizabeth18 · **on:** Jul 14, 2018

In a particular state, many commercial banks struggle to lend money to the borrowers due to lack of money supply. The Fed buys securities from these banks and this creates a smooth flow of money for the banks to conduct their transactions. In this case, which of the following tools has the Fed most likely used to control the money supply?
A) Open market operations
B) Discount rate changes
C) Reserve requirement changes
D) Interest rate charges

Question 2

Taiwanese manufacturers are dumping toys in Germany. What will happen to German toy manufacturers if the German government allows this dumping to continue?
A) They will be faced with the highest demand ever.
B) They will become more competitive.
C) They will be put out of business because they cannot compete with the prices.
D) They will try to dump their toys in other countries.
E) Their revenues will decrease, but their long-term success will not be affected.