Lowering the discount rate is a way to expand the money supply because
A) it encourages banks to borrow from the Fed so they can more easily accommodate their customers' needs for loans
B) it encourages business customers to borrow directly from the Fed
C) a lower discount rate reduces the amount of reserves banks are required to keep
D) a lower discount rate automatically reduces excess reserves
E) it encourages banks to sell U.S.government securities and increase their cash reserves
Correct Answer:
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Q147: If a bank receives $1,000 in currency
Q215: Increasing the required reserve ratio is
A)a contractionary
Q216: Raising the discount rate is
A)an expansionary policy
Q218: Decreasing the required reserve ratio is
A)a contractionary
Q219: By reducing the required reserve ratio,the Fed
Q221: The chance of encountering fake U.S.currency abroad
Q222: The world's largest source of bogus American
Q223: Transactions using debit cards and other electronic
Q224: If the Fed sells U.S.government securities to
Q225: The Fed operates
A)on a balanced budget
B)at a
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