Author Question: If the economy is inflationary, the Fed would most likely: a. encourage banks to provide loans by ... (Read 17 times)

anjilletteb · **on:** Jun 30, 2018

If the economy is inflationary, the Fed would most likely:
a. encourage banks to provide loans by buying government securities.
b. encourage banks to provide loans by raising the discount rate.
c. encourage banks to provide loans by selling government securities.
d. restrict bank lending by selling government securities.
e. restrict bank lending by lowering the federal funds rate.

Question 2

If the economy is inflationary, the Fed would most likely:
a. increase bank reserves by raising the discount rate.
b. increase bank reserves by buying government securities
c. decrease bank reserves by lowering the discount rate.
d. decrease bank reserves by selling government securities.
e. decrease bank reserves by lowering the legal reserve requirement.