10 Which of the following two things would decrease the money supply? a) The Fed sells bonds or increases the reserve requirement ratio b) The Fed buys bonds or decreases the reserve requirement ratio c) The Fed buys bonds or increases the reserve requirement ratio d) The Fed sells bonds or decreases the reserve requirement ratio
10 Which of the following two things would decrease the money supply? a) The Fed sells bonds or increases the reserve requirement ratio b) The Fed buys bonds or decreases the reserve requirement ratio c) The Fed buys bonds or increases the reserve requirement ratio d) The Fed sells bonds or decreases the reserve requirement ratio
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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part 10.
Transcribed Image Text:8
Which of the following would increase the size of an economy's deposit multiplier?
a) If banks decide to hold less excess reserves
b) If people hold a greater amount of currency rather than deposit money in the bank
c) If the Federal Reserve increases the reserve requirement ratio
d) If the Federal Reserve decides to buy bonds
9
To increase the money supply, the Fed could:
a) increase the reserve requirement ratio
b) sell bonds
c) decrease the discount rate
d) decrease income tax rates
10
Which of the following two things would decrease the money supply?
a) The Fed sells bonds or increases the reserve requirement ratio
b) The Fed buys bonds or decreases the reserve requirement ratio
c) The Fed buys bonds or increases the reserve requirement ratio
d) The Fed sells bonds or decreases the reserve requirement ratio
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