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Suppose the Federal Reserve Wants to Increase the Money Supply

Question 240

Multiple Choice

Suppose the Federal Reserve wants to increase the money supply.Which combination of actions would lead to the appropriate effect?


A) Increase the discount rate,decrease the reserve ratio,sell bonds.
B) Increase the discount rate,decrease the reserve ratio,buy bonds.
C) Decrease the discount rate,decrease the reserve ratio,buy bonds.
D) Decrease the discount rate,increase the reserve ratio,buy bonds.
E) Decrease the discount rate,decrease the reserve ratio,sell bonds.

Correct Answer:

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