Which of the following combinations would not produce conflicting effects on the supply of money?
a. The Fed pays a higher interest rate on bank reserves and increases the required reserve ratio.
b. The Fed conducts an open market purchase and lowers the discount rate.
c. The Fed pays a higher interest rate on bank reserves and conducts an open market sale of government securities.
d. None of the above would produce conflicting effects on the supply of money
Question 2
Government spending can be financed by all of the following, except:
a. personal income taxes.
b. investment spending.
c. government borrowing.
d. money creation.
e. excise taxes.
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