24. Which of the following would coincide with a tight money policy? A) Increasing spending. B) Decreasing interest rates. C) Increasing the reserves requirement ratio D) Increasing the money supply. 25. Which of the following would coincide with loosening the money supply? A) Decreasing spending. B) Increasing interest rates. C) The Fed selling more securities D) Decreasing interest rates. 26. The purpose of a tight money policy is to: A) reduce interest rates. B) reduce unemployment. C) reduce inflationary pressure. D) increase borrowing by businesses. 27. An appropriate monetary policy to pursue if an economy is experiencing
24. Which of the following would coincide with a tight money policy? A) Increasing spending. B) Decreasing interest rates. C) Increasing the reserves requirement ratio D) Increasing the money supply. 25. Which of the following would coincide with loosening the money supply? A) Decreasing spending. B) Increasing interest rates. C) The Fed selling more securities D) Decreasing interest rates. 26. The purpose of a tight money policy is to: A) reduce interest rates. B) reduce unemployment. C) reduce inflationary pressure. D) increase borrowing by businesses. 27. An appropriate monetary policy to pursue if an economy is experiencing
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:24. Which of the following would coincide with a tight money policy?
A) Increasing spending.
B) Decreasing interest rates.
C) Increasing the reserves requirement ratio
D) Increasing the money supply.
25. Which of the following would coincide with loosening the money supply?
A) Decreasing spending.
B) Increasing interest rates.
C) The Fed selling more securities
D) Decreasing interest rates.
26. The purpose of a tight money policy is to:
A) reduce interest rates.
B) reduce unemployment.
C) reduce inflationary pressure.
D) increase borrowing by businesses.
27. An appropriate monetary policy to pursue if an economy is experiencing demand-
pull inflation is:
A) reducing taxes.
B) increasing taxes
C) increasing interest rates
D) decreasing the reserve requirement ratio
28. Increasing the reserve requirement:
A) allows banks to make more loans and reduces the money supply.
B) allows banks to make more loans and increases the money supply.
C) reduces the amount of loans a bank can make and reduces the money supply.
D) reduces the amount of loans a bank can make and increases the money supply.
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