Federal Reserve?
a) raise the reserve requirement.
(b) engage in open market sales of bonds.
(c) engage in open market purchases of bonds.
(d) raise the discount rate
Answer:
Raising the reserve requirement would reduce the money supply causing an increase in interest. Which will lower investment --Nope
Selling of Bonds will also decrease the money supply in the market which will also raise interest -- Nope
Buying bonds will increase the money supply in the market and will in turn lower interest rates. Lower interest rates means more investment and higher aggregate expenditures. --Yep
Raising the discount rate cause higher interest rates which lowers investment -- Nope
Answer C
a. Raise the reserve requirement. That reduces the supply of money to loan. People will not have as much money to spend.
The federal reserve should be returned to the federal government instead of the private bankers. The federal reserve has nothing to do with the federal government
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